1
EXHIBIT 4.3.5
EXECUTION COPY
STATE COMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into on this 1st day of February, 2000, by and among STATE
COMMUNICATIONS, INC., a South Carolina corporation, and each of the other
parties listed on Schedule I hereto.
1. Certain Definitions. As used in this Agreement, the following terms shall
mean:
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, $.001 par value per share, of
the Company.
"Company" means State Communications, Inc., a South Carolina
corporation.
"Conversion Price" means the Conversion Price of the Preferred Stock as
defined in the Company's Articles of Amendment relating to the Preferred Stock,
as filed with the Office of the Secretary of State of South Carolina.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued thereunder, as they each may, from time to time, be in effect.
"Holders" means holders of any of the Preferred Stock or the
Registrable Shares.
"Non-Recoverable Expenses" means salaries and expenses of the Company's
officers and employees performing legal and accounting duties in connection with
the Company's obligations under this Agreement.
"Preferred Stock" means the Series C Convertible Preferred Stock of the
Company, $.01 par value per share.
"Public Offering" means a bona fide offering of Common Stock pursuant
to a Registration Statement.
"Registrable Shares" means (i) the shares of Common Stock issued or
issuable upon conversion of shares of Preferred Stock and (ii) any other shares
of Common Stock of the Company issued in respect of such shares (because of
stock splits, stock dividends, reclassifications, recapitalizations or similar
events).
2
"Registration Expenses" means all expenses incurred by the Company in
complying with this Agreement, including, without limitation, (i) all Commission
and any National Association of Securities Dealers, Inc. registration and filing
fees and expenses, fees and expenses of compliance with securities and blue sky
laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Shares), expenses relating to the preparation and printing of documents and of
certificates representing the Registrable Shares, fees and expenses of any
escrow agent, trustee or custodian acting for the Company, fees and
disbursements of counsel and independent certified public accountants of the
Company (including the expenses of any special audit or "cold comfort" letters
required by or incident to such compliance), fees and disbursements of counsel
retained in connection with each registration under Section 2 or 3 hereunder by
the holders of at least a majority of the Registrable Shares being registered
(which counsel shall be reasonably satisfactory to the Company), and fees and
expenses of any other persons, including special experts retained by the
Company, but excluding the fees and disbursements of any counsel or other
advisors or experts retained by holders of Registrable Shares (severally or
jointly), other than the counsel and experts specifically referred to above, and
excluding any underwriter discounts, fees or commissions attributable to the
sale of the Registrable Shares; and (ii) Non-Recoverable Expenses.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a Public Offering and sale of Common Stock of
the Company (other than (i) a registration statement on Form S-4 or Form S-8, or
their successors, or any other form for a limited purpose, (ii) any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation, (iii) a registration statement
filed in connection with an interest or dividend reinvestment plan, (iv) a
registration relating solely to employee benefit plans or to a transaction
subject to Rule 145 of the Securities Act, or (v) a registration relating to the
sale of indebtedness of the Company).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
"Series A Registration Rights Agreement" means the Registration Rights
Agreement dated October 28, 1998 between the Company and the holders of the
Company's Series A Convertible Preferred Stock.
"Series B Registration Rights Agreement" means the Registration Rights
Agreement dated July 29, 1999 between the Company and the holders of the
Company's Series B Convertible Preferred Stock.
2
3
2. Demand Registrations.
(a) At any time after the expiration of 180 days after the closing of a
Public Offering, one or more Holders representing in the aggregate in excess of
30% of the Registrable Shares then held by all Holders, may request, in writing,
that the Company file a Registration Statement under the Securities Act. Upon
receipt of any such request, the Company shall promptly give written notice of
such proposed registration to all Holders. Each Holder shall have the right, by
giving written notice to the Company within 15 days after the Company provides
its notice, to elect to have included in such registration such of its
Registrable Shares as such Holder may request in such notice of election.
Thereupon, the Company shall, as expeditiously as possible, use its best efforts
to effect the registration under the Securities Act of all Registrable Shares
which the Company has been requested so to register.
(b) If the Holders initiating the registration request hereunder (the
"Initiating Holders") intend to distribute the Registrable Shares covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to this Section 2 and the Company shall
include such information in the written notice referred to in Section 2(a)
hereof. In such event, the right of any Holder to include his or its Registrable
Shares in such registration shall be conditioned upon the inclusion of such
Holder's Registrable Shares in the underwriting. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 2(b), if the managing underwriter with respect to the proposed offering
advises the Holders proposing to sell Registrable Shares that would otherwise be
included in the underwriting that marketing factors require a limitation on the
number of shares to be underwritten, the number of Registrable Shares that may
be included in the underwriting shall be allocated among all such Holders,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Shares proposed to be included in the Registration
Statement by each such Holder.
(c) The Company shall not be required to effect more than three
registrations of Registrable Shares pursuant to Section 2(a) hereof.
(d) At the time of any request to register Registrable Shares pursuant
to this Section 2, the Company may at its option direct that such request be
delayed for a period not in excess of three months if, in the opinion of the
Company's Board of Directors, the filing of such Registration Statement would
adversely affect the Company's ability to complete any pending or proposed
material transaction, provided that such right to delay a request may be
exercised by the Company not more than once in any twelve-month period.
(e) The Initiating Holders of any Registration Statement filed pursuant
to this Section 2 shall designate the method of distribution of the Registrable
Shares. The Initiating Holders may designate the managing underwriter (who shall
be the lead
3
4
underwriter) for any Registration Statement filed pursuant to this Section,
provided such designee is reasonably satisfactory to the Company, and the
Company may designate a co-managing underwriter in such offering, provided such
designee is reasonably satisfactory to Holders representing a majority of the
Registrable Shares to be included in the Registration. The Company shall afford
the underwriters, their accountants and attorneys full access to its personnel
and offices for the purpose of confirming the accuracy and completeness of the
Registration Statement, in accordance with the provisions of Section 4 hereof.
(f) If in the opinion of the underwriters selected to manage the
underwriting, more Common Stock could be sold than is represented by the
Registrable Shares included in the registration without adversely affecting the
price per share, or with the consent of Holders representing two-thirds of the
Registrable Shares to be included, the Company shall be entitled to expand the
offering to include newly issued Common Stock or Common Stock held by third
parties. If the Common Stock so included represents more than half of all Common
Stock to be offered in the Registration Statement, the registration may, at the
option of the Initiating Holders, be deemed to be an incidental registration
under Section 3, rather than a required registration under this Section 2, and
the registration rights of the Holders provided in Section 2(c) shall remain
fully available as if the registration had originated under Section 3 rather
than under Section 2.
(g) Notwithstanding anything set forth elsewhere in this Section 2, the
Company shall have no responsibility to cause a Registration Statement to become
effective (i) at a time when it would be required under the rules and
regulations of the Securities and Exchange Commission to prepare and file
audited financial statements for a period other than a completed fiscal year,
(ii) when the Company would be required to prepare and file audited financial
statements for a completed fiscal year prior to 90 days following the end of
such year, or (iii) within 180 days of the effective date of any prior
Registration Statement filed by the Company in which the Holders could
participate.
(h) If any Registration Statement prepared pursuant to this Section 2
is not filed or does not become effective as a result of the decision of the
Initiating Holders or any underwriter designated by them, the obligation of the
Company to prepare and file a Registration Statement at the request of such
Initiating Holders shall nevertheless have been satisfied; provided that if the
decision not to file the Registration Statement or to withdraw the Registration
Statement prior to it becoming effective is the result of a material adverse
change in the business of the Company, the registration rights of the Holders
provided in Section 2(c) shall remain fully available as if the registration had
not been requested by the Initiating Holders. If the Registration Statement
otherwise fails to become effective, the registration rights of the Holders
provided in Section 2(c) remain fully available as if the registration had not
been requested by the Initiating Holders.
4
5
3. Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement it
shall, at least 30 days prior to such filing, give written notice to all Holders
of its intention to do so and, upon the written request of a Holder or Holders
given within 10 days after the Company provides such notice (which request shall
state the intended method of disposition of such Registrable Shares), the
Company shall use its best efforts to cause all Registrable Shares that the
Company has been requested by such Holder or Holders to register to be
registered under the Securities Act to the extent necessary to permit their sale
or other disposition in accordance with the intended methods of distribution
specified in the request of such Holder or Holders; provided, that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 3 without obligation to any Holder.
(b) In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the Holders holding such Registrable Shares
thereof accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it and enter into a customary underwriting
agreement, and then only in such quantity as will not, in the opinion of the
managing underwriter, jeopardize the success of the offering by the Company. If
in the opinion of the managing underwriter the registration of all, or any part
of, the Registrable Shares which Holders have requested to be included would
adversely affect such Public Offering, then the Company shall be required to
include in the underwriting only that number of Registrable Shares, if any, that
the managing underwriter believes may be sold without causing such adverse
effect. If the number of Registrable Shares to be included in the underwriting
in accordance with the foregoing is less than the total number of Registrable
Shares that Holders have requested to be included, then the amount of securities
to be offered for the accounts of all persons seeking to include securities of
the Company in the Registration Statement shall be reduced in the following
order of priority to the extent necessary to cause the amount to be included in
the Registration Statement not to exceed the amount recommended by such managing
underwriter:
(i) first, the amount of securities to be offered for the
accounts of Company shareholders other than Holders ("Other Shareholders") that
do not have a contractual right to require the Company to include the securities
held by them in a registration shall be reduced pro rata (based upon the amount
of securities each such person sought to include in the offering) to zero, if
necessary,
(ii) next, the amount of securities to be offered for the
account of Other Shareholders that have a contractual right (subordinate to the
Holders rights hereunder) to require the Company to include the securities held
by them in a registration shall be reduced pro rata (based upon the amount of
securities each such person sought to include in the offering) to zero, if
necessary, and
5
6
(iii) finally, the amount of securities to be offered for the
account of Holders of Registrable Shares and all Other Shareholders that have a
contractual right (on parity with Holders' rights hereunder) to require the
Company to include the securities held by them in a registration shall be
reduced pro rata (based upon the amount of securities each such Person sought to
include in the offering); provided, that the rights granted in Sections 3 and 4
of the Series A Registration Rights Agreement and the Series B Registration
Rights Agreement and Section 2 of the Registration Rights Agreement between the
Company and Seruus Telecom Fund, L.P., dated February 19, 1998 shall be
subordinate to the rights granted in Section 2(a) of this Agreement.
4. Registrations on Form S-3. Notwithstanding any other term or provision of
this Agreement, at such time as the Company shall have qualified for the use of
Form S-3 promulgated under the Securities Act, the Holders shall have the right
to request in writing an unlimited number of registrations on Form S-3 (or such
successor form) of Registrable Shares, which request or requests shall (i)
specify the number of Registrable Shares intended to be sold or disposed of;
(ii) state the intended method of disposition of such Registrable Shares; and
(iii) relate to Registrable Shares having an anticipated aggregate offering
price of not less than $500,000, provided, however, the Holders may only make
one such request in any 12-month period. A requested registration on Form S-3
pursuant to this Section 4 shall not count as a registration demanded pursuant
to Section 2 hereof. During the pendency of any offering under this Section 4 if
the Company shall inform the Holders that there is material non-public
information regarding the Company, the Holders shall cease selling activities in
such offering and the Company shall promptly advise the members of its Board of
Directors of the material non-public information (to the extent not previously
disclosed to them) and a decision shall be made whether or when such information
should be publicly disclosed. The Holders shall not recommence selling
activities until the Company shall inform the Holders that there is no material
non-public information regarding the Company; provided, however, the Company
shall use its best efforts to insure that the delay arising out of the failure
to disclose such information does not persist for more than 30 days.
5. Registration Procedures. If and whenever the Company is required by Sections
2, 3, or 4 of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective for such reasonable period of time as
required to complete the Public Offering;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for such reasonable period of time as required
to complete the Public Offering and comply with the provisions of the Securities
Act with respect to the disposition of all shares covered by such Registration
Statement;
6
7
(c) provide the selling stockholders and the underwriters (which term,
for purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any,
of the shares being sold and counsel for such underwriters and counsel for such
selling stockholders (which counsel shall be subject to approval by the Company,
such approval not to be unreasonably withheld) the opportunity to participate in
the preparation of the Registration Statement, each prospectus included therein
or filed with the Commission, and each amendment or supplement thereto; and make
available for inspection by such selling stockholders or other persons such
financial and other information, books and records of the Company and cause the
officers, directors and employees of the Company and counsel and independent
certified public accountants of the Company to respond to such inquiries as
shall be reasonably necessary, in the opinion of respective counsel to such
selling stockholders and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act;
(d) promptly notify (in writing, if so requested) the selling
stockholders and the underwriters, if any, (i) when the Registration Statement,
the prospectus or any prospectus supplement or post-effective amendment has been
filed, and with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any material comments by
the Commission with respect thereto or any request by the Commission for
amendments or supplements to the Registration Statement or the prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the occurrence of any
event, at any time during which the Registration Statement remains effective,
that causes the representations and warranties of the Company contemplated by
Section 8 hereof to cease to be true and correct in all material respects, (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, or (vi) of the
occurrence or failure to occur of any event, or change in circumstance, at any
time when a prospectus is required to be delivered under the Securities Act, as
a result of which the Registration Statement, prospectus, any prospectus
supplement, or any document incorporated by reference in any of the foregoing
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(e) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement hereunder or any
post-effective amendment thereto at the earliest practicable date;
(f) if requested by the managing underwriter or underwriters or by
selling stockholders representing at least a majority of the Registrable Shares
being included in the Registration Statement, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or
7
8
such selling stockholders reasonably specify should be included therein relating
to the sale of the Registrable Shares, including, without limitation,
information with respect to the number or amount of Registrable Shares being
sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Shares to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment; provided
that the Company and its counsel are reasonably satisfied that such additional
information does not constitute 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 light of the circumstances then existing.
(g) as expeditiously as possible furnish to each selling stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling stockholder may reasonably request in order to
facilitate the Public Offering; and furnish to each selling stockholder and each
underwriter, if any, such number of copies of the Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in the Registration Statement (including each
preliminary prospectus and any summary prospectus) , in conformity with the
requirements of the Securities Act, and such other documents as such selling
stockholder and underwriter, if any, may reasonably request in order to
facilitate the Public Offering; the Company consents to the use of the
prospectus or any amendment or supplement thereto by each of the selling
stockholders and the underwriters in connection with the offering and sale of
the Registrable Shares covered by the prospectus or any supplement or amendment
thereto;
(h) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or blue sky laws of such states as the underwriters shall reasonably
request, and do any and all other acts and things that may be reasonably
necessary or desirable to enable the Public Offering to be consummated;
provided, however, that the Company shall not be required in connection with
this Section 5(h) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;
(i) use its best efforts to cause all of the Registrable Shares to be
included in a Registration Statement hereunder to be registered with or approved
by such other governmental agencies or authorities as may be necessary by virtue
of the business and operations of the Company to enable the Public Offering to
be consummated;
(j) facilitate the timely preparation and delivery of certificates
representing Registrable Shares to be sold; and
(k) provide a CUSIP number for all Registrable Shares, not later than
the effective date of the Registration Statement.
8
9
If the Company has delivered preliminary or final prospectuses to the
selling stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling stockholders and, if requested, the selling stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling stockholders shall be free to resume making offers of
the Registrable Shares.
6. Allocation of Expenses. The Company shall pay all Registration Expenses of
all registrations under this Agreement including, without limitation,
Registration Statements that are not declared effective as contemplated in
Section 2(h) hereof. All underwriting discounts and selling commissions
applicable to the sale of the Registrable Shares shall be borne by the
participating sellers in proportion to the number of shares sold by each or as
shall otherwise be agreed to by such participating sellers other than the
Company (except to the extent the Company shall be a seller).
7. Indemnification.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold harmless the seller of such Registrable Shares, each director and
officer of such seller, each underwriter of such Registrable Shares, and each
other person, if any, who controls such seller or underwriter within the meaning
of the Securities Act or the Exchange Act, against any losses, claims, damages
or liabilities, joint or several, including, without limitation, subject to
Section 7(c) hereof, any amounts paid in settlement, to which such seller,
underwriter or controlling person may become subject under the Securities Act,
the Exchange Act, state securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company shall reimburse such seller, underwriter and each such controlling
person for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, (i) that
the Company shall not be liable to any such seller, underwriter or controlling
person in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of such seller
or underwriter or controlling person specifically for use in the preparation
thereof and (ii) provided, however, that the
9
10
indemnity agreement contained in this Section 7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld. Such indemnification and reimbursement of expenses
shall remain in full force and effect regardless of any investigation made by or
on behalf of such seller, its directors or officers, such underwriter, its
directors or officers, or such controlling person, and shall survive the
transfer of any or all Registrable Shares by such seller.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, shall indemnify and hold harmless the
Company, each of its directors and officers, each other seller and each
underwriter, if any, and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; and each such
seller shall reimburse the Company, each of its directors and officers, each
underwriter and each controlling person for any legal or any other expenses
reasonably incurred by the Company, such directors and officers, underwriters
and controlling persons in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such seller; provided, further,
however, that, to the extent permitted by law, the indemnification obligation of
each seller of Registrable Shares shall be limited to the net proceeds received
by such selling shareholder in the Public Offering in dispute. Such
indemnification and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company, its
officers or directors, any such other seller, its officers or directors, or any
such controlling person, and shall survive the transfer of any or all
Registrable Shares by any such other seller.
(c) Each party entitled to indemnification under this Section 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying
10
11
Party to assume the defense of any such claim or any litigation resulting
therefrom; provided, however, that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld); provided,
however, that an Indemnified Party shall have the right to retain its own
counsel (limited to one counsel for all Indemnified Parties), with the fees and
expenses of such counsel to be paid by the Indemnifying Party, if representation
of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between
such Indemnified Party and any other party represented by such counsel in such
proceeding. The failure by an Indemnified Party to deliver written notice to the
Indemnifying Party within a reasonable time of the Indemnified Party's discovery
of such claim, if materially prejudicial to its ability to defend such claim,
shall relieve the Indemnifying Party of its obligations under this Section 7 but
only to the extent of such material prejudice. The Indemnified Party may
participate in such defense at such party's expense. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.
(d) (i) If for any reason the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under this Section 7 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to herein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims damages or liabilities (or
actions in respect thereof), in such proportion as is appropriate to reflect the
relative fault of each Indemnifying Party and the Indemnified Party as well as
any other relevant equitable considerations; provided, however, that to the
extent permitted by law, the indemnification obligation of each seller of
Registrable Shares shall be limited to the net proceeds received by such Selling
Shareholders in the Public Offering in dispute. The relative fault of each
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages or liabilities referred to above shall be deemed to include, subject to
the limitations set forth in Section 7(c), any legal or other fees or expenses
reasonably incurred by such party.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the sellers or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
11
12
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(iii) The contribution provided for in this Section 7(d) shall
survive, with respect to a Holder, the transfer of Registrable Shares by such
Holder and with respect to a Holder or the Company shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Indemnified Party.
(e) The indemnification required by this Section 7 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred, subject to refund in the event any such payments are determined not
to have been due and owing hereunder.
8. Agreements with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2 hereof, the Company agrees to enter
into such customary agreements (including an underwriting agreement) and take
such other actions in connection therewith as the Holders representing at least
a majority of Registrable Shares to be included in a Registration Statement
hereunder shall reasonably request in order to expedite or facilitate the Public
Offering and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten registration
(i) make such representations and warranties to the selling stockholders and the
underwriters, if any, in form, substance and scope as are customarily made in
such a registration; (ii) obtain an opinion of counsel to the Company in
customary form and covering such matters of the type customarily covered by such
opinion as the Holders representing at least a majority of Registrable Shares to
be included in such registration and the underwriters, if any, may reasonably
request, addressed to each selling stockholder and the underwriters, if any, and
dated the effective date of such Registration Statement (or, if such
registration includes an underwritten offering, dated the date of the closing
under the underwriting agreement); (iii) obtain a "cold comfort" letter from the
independent certified public accountants of the Company addressed to the selling
stockholders and the underwriters, if any, (and which may also be addressed to
the Board of Directors of the Company) dated the effective date of such
Registration Statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement), such
letter to be in customary form and covering such matters of the type customarily
covered by such letter; and (iv) deliver such documents and certificates as may
be reasonably requested by the Holders representing at least a majority of
Registrable Shares being sold and the managing underwriters, if any, to evidence
compliance with clause (i) above and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company.
9. Information by Holder. It shall be a condition precedent to the obligations
of the Company under this Agreement that each Holder of Registrable Shares to be
included in any registration shall furnish to the Company such information
regarding such Holder
12
13
and the distribution proposed by such Holder as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
10. Rule 144 Requirements. After the registration by the Company of a class of
securities under Section 12 of the Exchange Act, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 (or any successor rule) under the Securities
Act;
(b) use its best efforts to 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 (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any Holder upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the closing of the first sale of securities by
the Company pursuant to a Registration Statement), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company as such Holder may
reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any such securities without registration.
11. Transfer of Rights.
(a) The rights granted to a Holder under this Agreement may be
transferred by such Holder to another Holder or to any transferee if (i) there
is transferred to such transferee at least 10% of the Registrable Shares
originally issued by the Company to the transferring Holder and (ii) the Company
is given written notice by the transferee at the time of such transfer stating
the name and address of the transferee and identifying the securities with
respect to which such rights are being assigned; provided, however, that the
rights granted to a Holder under this Agreement may not in any event be
transferred by any Holder with respect to securities which at the time of filing
of any Registration Statement are eligible for sale by the Holder under Rule
144(k) under the Securities Act. Any transferee to whom rights under this
Agreement are transferred shall, as a condition to such transfer, deliver to the
Company a written instrument by which such transferee agrees to be bound by the
obligations imposed upon Holders under this Agreement to the same extent as if
such transferee were a Holder hereunder.
(b) Notwithstanding anything to the contrary herein, any Holder may
transfer rights granted to such Holder under this Agreement to any affiliate of
such Holder, any liquidating trust established with respect to such Holder or
any limited partner, shareholder or member of such Holder in connection with a
distribution of assets to such Holder's partners, shareholders or members if
such transferee is a transferee of shares of Preferred Stock or Registrable
Shares and such transferee delivers to the Company a
13
14
written instrument by which such transferee agrees to be bound by the
obligations imposed upon Holders under this Agreement to the same extent as if
such transferee were a Holder hereunder. In the event of such transfer, such
transferee shall be deemed a Holder for purposes of this Section 11 and may
again transfer such rights to any other person or entity which acquires shares
of Preferred or Registrable Shares from such transferee, subject to and in
accordance with Section 11(a) hereof.
12. Other Registration Rights. Except (i) as provided in that certain
Registration Rights Agreement between the Company and Seruus Telecom Fund, L.P.
("Seruus"), dated February 19, 1998 (the "Seruus Registration Rights
Agreement"), (ii) as provided in the "Series A Registration Rights Agreement,
(iii) as provided in the Series B Registration Rights Agreement, and (iv) the
Company's right to grant selling shareholders registration rights on Form S-3
subject to the limitations set forth in Section 4 hereof, the Company shall not
grant demand registration rights to any party or any incidental registration
rights that are superior to or pari passu with the incidental registration
rights of the Holders, the holders of Series A or Series B Preferred Stock or
Seruus, without the written consent of Holders representing in the aggregate
more than 50% of the Registrable Shares. Except as set forth in Section
3(b)(iii) of this Agreement, the Company and the Holders acknowledge and agree
that the registration rights granted under the Seruus Registration Rights
Agreement, the Series A Registration Rights Agreement and the Series B
Registration Rights Agreement shall be deemed to be pari passu with the
registration rights granted hereunder.
13. Suspension Rights. Notwithstanding the provisions of this Agreement, the
Company's obligation to file a Registration Statement, or cause such
Registration Statement to become and remain effective, shall be suspended for a
period not to exceed 90 days in any 12 month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of counsel to the Company, should not be disclosed.
14. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived, either generally or in a
particular instance and either retroactively or prospectively, with the written
consent of the Company and Holders representing in the aggregate more than 66
2/3% of the Registrable Shares, provided that no such amendment or waiver of any
term of this Agreement shall affect any outstanding Registrable Shares on a
disproportionate basis without the specific consent of each Holder affected
thereby. Any amendment or waiver effected in accordance with this Section 14
shall be binding upon each Holder, each future Holder and the Company. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instance, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
14
15
15. Entire Agreement: Successors and Assigns of the Company.
(a) This Agreement embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter.
(b) This Agreement shall be binding, in accordance with its terms, upon
any successor, by way of merger, consolidation, sale of assets or otherwise, of
the Company.
16. Counterparts. This Agreement may be executed in several counterparts, all of
which need not be signed by all the parties hereto, and each of which shall be
deemed an original, but all of which together constitute one and the same
agreement.
17. Headings. The headings of the sections of this Agreement have been added for
convenience only and shall not be deemed to be a part of this Agreement.
18. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other severable
provision.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina, without regard for the
conflict of laws rules thereof.
20. Notices. All notices and other communications under this Agreement shall be
in writing and shall be (i) sent by facsimile transmission and by certified or
registered mail, return receipt requested, courier or overnight mail, or (ii)
sent by certified or registered mail, return receipt requested, courier or
overnight mail (1) if to any Holder, at the registered facsimile number and
address of such holder as set forth in the register kept at the principal office
of the Company, or (2) if to the Company, to 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx II, Esq., or at
such other address or facsimile number as it shall have furnished in writing to
all holders of Registrable Shares at the time outstanding. Any written
communication so addressed, sent by facsimile transmission or certified or
registered mail, return receipt requested, courier or overnight mail, shall be
deemed to have been given when sent via facsimile or mailed. All other written
communications shall be deemed to have been given upon receipt thereof.
[remainder of page intentionally blank]
15
16
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
STATE COMMUNICATIONS, INC.
By: __________________________________
Title: _______________________________
RICHLAND VENTURES II, L.P.
By: Richland Partners II, Inc.,
General Partner
By: __________________________________
Title: _______________________________
RICHLAND VENTURES III, L.P.
By: Richland Partners III, Inc.,
General Partner
By: __________________________________
Title: _______________________________
FIRST UNION CAPITAL PARTNERS, INC.
By: __________________________________
Title: _______________________________
XXXXX GLOBAL INVESTMENTS, LTD.
By: Xxxxx Capital Management, Inc.,
Trading Advisor
By: __________________________________
Title: _______________________________
REMINGTON INVESTMENTS STRATEGIES, L.P.
By: Xxxxx Capital Advisors, L.L.C.,
General Partner
By: __________________________________
Title: _______________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
16
17
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
BOSTON MILLENNIA PARTNERS
LIMITED PARTNERSHIP
By: Xxxx Partners Limited
Partnership, General Partner
By: __________________________________
Title: _______________________________
BOSTON MILLENNIA ASSOCIATES I
PARTNERSHIP
By: __________________________________
Title: _______________________________
CITIZENS CAPITAL, INC.
By: __________________________________
Title: _______________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
17
18
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
SOUTHEASTERN TECHNOLOGY FUND
By: __________________________________
Title: _______________________________
________________________________(SEAL)
Xxxxxx X. Xxxxxx
________________________________(SEAL)
Xxxxxxx X. Xxxxxx
________________________________(SEAL)
Xxxxxxx X. Xxxxxx
________________________________(SEAL)
Xxxxxxx X. Xxxxxx
________________________________(SEAL)
Xxxxxx X. Xxxxxxxx
________________________________(SEAL)
Xxxxxx X. Xxxxxxxxx
________________________________(SEAL)
Xxxxxx Xxxxxxxx
________________________________(SEAL)
Xxxxx Xxxxxx
SERUUS TELECOM FUND, L.P.
By: _____________, its General Partner
By: __________________________________
Title: _______________________________
SIGNATURES CONTINUED ON NEXT PAGE
18
19
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
SERUUS VENTURES, LLC.
By: __________________________________
Title: _______________________________
________________________________(SEAL)
Xxxxxxxx X. Xxxxxxx III
________________________________(SEAL)
Xxxx X. Xxxxxxx
________________________________(SEAL)
Xxxx X. Xxxxx, Xx.
XXXXX XXXXXXX PROFIT SHARING PLAN
FUND II
By: __________________________________
By: __________________________________
Title: _______________________________
WILLOU & CO.
By: __________________________________
Title: _______________________________
SIGNATURES CONTINUED ON NEXT PAGE
19
20
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
XXXXXX CHARITABLE REMAINDER UNITRUST
By: __________________________________
Title: _______________________________
VFO PARTNERS, LTD.
By: __________________________________
By: __________________________________
Title: _______________________________
TORONTO DOMINION CAPITAL
(U.S.A.), INC.
By: __________________________________
Title: _______________________________
NEWCOURT COMMERCIAL FINANCE
CORPORATION, an affiliate of The
CIT Group, Inc.
By: __________________________________
Title: _______________________________
SIGNATURES CONTINUED ON NEXT PAGE
20
21
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
By: BancAmerica Capital Management
SBIC I, LLC,
Its general partner
By: BancAmerica Capital Management I,
L.P.,
Its sole member
By: BACM I GP, LLC,
Its general partner
By: ______________________________________
Name: Xxxxxx X. Xxxxxxxx, III
Title: Member
CAPITAL INSIGHTS GROWTH INVESTORS, L.P.
By: ______________________________________
Title: ___________________________________
__________________________________________
Xxxxx X. Xxxxxxxxxx, Xx.
__________________________________________
Xxxxx X. Xxxxx
__________________________________________
Xxxxxxx Xxxxxxx
SIGNATURES CONTINUED ON NEXT PAGE
21
22
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first above written.
__________________________________________
Xxxxxx X. Xxxxxxxx
SIGNATURES CONTINUED ON NEXT PAGE
22
23
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first above written.
__________________________________________
Xxxxx Xxxxxx
SIGNATURES CONTINUED ON NEXT PAGE
23
24
ACKNOWLEDGEMENT AND CONSENT
The undersigned party consents to the registration rights granted pursuant to
the terms of this Agreement.
SERUUS TELECOM FUND, L.P.
By: ___________________, its General Partner
By: ________________________________________
Title: _____________________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
24
25
EXECUTION COPY
ACKNOWLEDGEMENT AND CONSENT
The undersigned party consents to the registration
rights granted pursuant to the terms of this Agreement.
STATE COMMUNICATIONS, INC.
By: _____________________________________
Title: __________________________________
RICHLAND VENTURES II, L.P.
By: Richland Partners II, Inc., General Partner
By: _____________________________________
Title: __________________________________
RICHLAND VENTURES III, L.P.
By: Richland Partners III, Inc., General Partner
By: _____________________________________
Title: __________________________________
FIRST UNION CAPITAL PARTNERS, INC.
By: _____________________________________
Title: __________________________________
XXXXX GLOBAL INVESTMENTS, LTD.
By: Xxxxx Capital Management, Inc., Trading Advisor
By: _____________________________________
Title: __________________________________
REMINGTON INVESTMENTS STRATEGIES, L.P.
By: Xxxxx Capital Advisors, L.L.C., General Partner
By: _____________________________________
Title: __________________________________
26
ACKNOWLEDGEMENT AND CONSENT
The undersigned party consents to the registration
rights granted pursuant to the terms of this Agreement.
BOSTON MILLENNIA PARTNERS LIMITED PARTNERSHIP
By: Xxxx Partners Limited Partnership, General Partner
By: _____________________________________
Title: __________________________________
BOSTON MILLENNIA ASSOCIATES I PARTNERSHIP
By: _____________________________________
Title: __________________________________
SOUTHEASTERN TECHNOLOGY FUND
By: _____________________________________
Title: __________________________________
_________________________________________
Xxxx X. Xxxxxxx
XXXXX XXXXXXX PROFIT SHARING PLAN
FUND II
By: _____________________________________
By: _____________________________________
Title: __________________________________
_________________________________________
Xxxxxxx X. Xxxxxx
XXXXXX CHARITABLE REMAINDER UNITRUST
By: _____________________________________
Title: __________________________________
2
27
ACKNOWLEDGEMENT AND CONSENT
The undersigned party consents to the registration
rights granted pursuant to the terms of this Agreement.
_________________________________________
Xxxx X. Xxxxx, Xx.
WILLOU & CO.
By: _____________________________________
Title: __________________________________
3
28
EXECUTION COPY
Schedule I
INVESTORS
Richland Ventures II, L.P.
Richland Ventures III, L.P.
First Union Capital Partners, Inc.
Xxxxx Global Investments, Ltd.
Remington Investments Strategies, L.P.
Southeastern Technology Fund
Boston Millennia Partners Limited Partnership
Boston Millennia Associates I Partnership
Toronto Dominion Capital (U.S.A.), Inc.
Newcourt Commercial Finance Corporation
BancAmerica Capital Investors SBIC I, L.P.
