Exhibit 4.10
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is entered into as of January 15, 1999, by and between I-LINK
INCORPORATED, a Florida corporation (the "Company"), and WINTER HARBOR,
L.L.C., a Delaware limited liability company (the "Investor").
WHEREAS, the Company and the Investor entered into a Registration Rights
Agreement dated as of October 10, 1997 (the "Original Agreement") pursuant to
which the Company granted certain rights with respect to shares of the
Company's Series M Participating Convertible Preferred Stock (the "Series M
Preferred") and the Common Stock issuable upon conversion thereof and shares
of Common Stock issuable upon exercise of the warrants issued to the Investor
pursuant to a Securities Purchase Agreement (the "Securities Purchase
Agreement"), dated as of September 30, 1997; and
WHEREAS, the Company has entered into a Series X, X, X, X, X, X and J
Warrant Agreement and a Series K Warrant Agreement with Investor; and
WHEREAS, the Company has entered into an Agreement (the "Additional
Agreement"), dated as of the date hereof, with Investor providing, in
relevant part, for the conversion of certain loans between the Company and
the Investor into Series M Preferred and for the issuance to Investor of
certain warrants to acquire 11,740,000 shares of the Common Stock of the
Company (the "Additional Warrants" and, together with the Series D, E, F, G,
H, I, J and K Warrants, the "Warrants"); and
WHEREAS, the Company has agreed to enter into this Agreement and to
amend and restate the Original Agreement to grant the same rights with
respect to shares of Common Stock issuable upon (i) exercise of the Warrants,
(ii) conversion of the additional shares of Series M Preferred issuable
pursuant to the Additional Agreement and (iii) any other shares of Common
Stock of the Company which the Investor holds or may obtain in any manner at
any time hereafter (the "Additional Shares");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending legally to be bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings:
1.1 "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
1.2 The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
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compliance with the Securities Act, and the Commission's declaration or
ordering of the effectiveness of such registration statement.
1.3 "Registrable Securities" shall mean (i) all shares of Series
M Preferred at any time held by the Investor, whether issued to the Investor
pursuant to the Securities Purchase Agreement, the Additional Agreement or
otherwise, (ii) all shares which haven't been previously registered of the
Company's Series N Convertible Preferred Stock (the "Series N Preferred") at
any time held by the Investor, whether issued to the Investor pursuant to the
Loan Agreement dated as of the date hereof between the Investor and the
Company, the Rights Offering required pursuant to such Loan Agreement or
otherwise, (iii) any other shares of preferred stock of the Company at any
time held by the Investor, (iv) any and all shares of Common Stock of the
Company issued or issuable upon the exercise of the Warrants, the exercise of
any other warrants issued at any time by the Company to the Investor or the
conversion of the Series M Preferred, the Series N Preferred or any other
preferred stock of the Company held by the Investor (iv) all Additional
Shares, and (v) all securities of the Company issued or issuable with respect
to any securities referred to in clauses (i), (ii), (iii) and (iv) above,
upon any stock split, stock dividend, reclassification, recapitalization or
similar event, but excluding from the foregoing clauses (i), (ii), (iii) and
(iv) shares that (y) have been sold to or through a broker, dealer or
underwriter in a public distribution or a public securities transaction, or
(z) are then eligible to be sold without limitation, pursuant to Rule 144(k)
promulgated under the Securities Act (or any similar successor provision
thereto), and the holder of such shares is not then an "affiliate" of the
Company within the meaning of such Rule 144(k) (and has not been such an
affiliate for the preceding three months); to the extent that such holder is
an "affiliate" of the Company within the meaning of Rule 144, such that such
holder's shares of underlying Common Stock are not eligible to be sold
pursuant to Rule 144(k) without limitation, such shares of underlying Common
Stock shall remain Registrable Securities.
1.4 "Registration Expenses" shall mean all expenses, except
Selling Expenses, incurred by the Company in complying with Articles 2, 3 and
4 hereof and in effecting any registration described therein, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of legal counsel and
accountants for the Company, fees and disbursements of one legal counsel for
the selling shareholders, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall be
paid in any event by the Company).
1.5 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.6 "Selling Expenses" shall mean all underwriting fees,
discounts, selling commissions and stock transfer taxes applicable to the
Registrable Securities registered by the Investor.
ARTICLE 2
REQUESTED REGISTRATION
2.1 Request for Registration. The Investor may request, in
writing, that the Company effect a registration or qualification with respect
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to all or part of the Registrable Securities. In the event the Company shall
receive from the Investor such a written request, the Company will:
(a) use its best efforts to effect such registration or
qualification as soon as practicable (including, without limitation,
undertaking to file post-effective amendments, appropriate qualifications
under applicable blue sky or other state securities laws, and undertaking to
effect appropriate compliance with applicable regulations issued under the
Securities Act, and any other governmental requirements or regulations) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request; provided, however, that the Company shall not be
obligated to take any action to effect any such registration, qualification
or compliance pursuant to this Article 2:
(i) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(ii) After the Company has effected four such requested
registrations pursuant to this Article 2 (not including registrations on Form
S-3), each such registration has been declared or ordered effective, and the
securities offered pursuant to each such registration have been sold; or
(iii) If the Company then meets the eligibility
requirements applicable to the use of Form S-3 in connection with such
registration and is able to effect such requested registration pursuant to
Article 4 hereof.
(b) Subject to the foregoing clauses (i) through (iii), the
Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after receipt
of the request of the Investor; provided, however, that if the Company shall
furnish to the Investor a certificate signed by the chief executive officer
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its shareholders for such registration statement to be filed as a result
of a pending corporate transaction, the Company shall have the right to defer
such filing for a period of not more than 90 days after receipt of the
request of the Investor, provided, however, that the Company shall not be
permitted to exercise such deferral right under this Section 2.1(b) or
Section 4.1(c) hereof more than once in any 365-day period.
2.2 Underwriting.
(a) The distribution of the Registrable Securities covered by
the request of the Investor may, at the option of the Investor, be effected
by means of an underwritten offering.
(b) If the Investor elects to sell Registrable Securities
pursuant to an underwritten offering, the Company and the Investor shall
enter into an underwriting agreement in customary form with a managing
underwriter of nationally recognized standing selected for such underwriting
by the Investor, subject to the approval of the Company, which will not be
unreasonably withheld or delayed. Notwithstanding any other provision of
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this Article 2, if the managing underwriter advises the Investor in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the underwriters may exclude shares requested to be
included in such registration; provided, however, that the Investor shall
have first claim on the number of shares of Registrable Securities that may
be included in the registration. No Registrable Securities excluded from the
underwriting by reason of the managing underwriter's marketing limitation
shall be included in such registration.
(c) If the Investor disapproves of the terms of the
underwriting, the Investor may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. The Registrable Securities so
withdrawn shall also be withdrawn from registration.
2.3 Inclusion of Shares by Company. If the managing underwriter
for an underwritten offering has not limited the number of Registrable
Securities to be underwritten, the Company may include securities for its own
account or for the account of others in such registration if the managing
underwriter so agrees and if the number of Registrable Securities held by the
Investor which would otherwise have been included in such registration and
underwriting will not thereby be limited. The inclusion of such shares shall
be on the same terms as the registration of shares held by the Investor. In
the event that the underwriters exclude some of the securities to be
registered, the securities to be sold for the account of the Company and any
other holders shall be excluded in their entirety prior to the exclusion of
any Registrable Securities held by the Investor.
ARTICLE 3
COMPANY REGISTRATION
3.1 Notice of Registration to the Investor. If at any time or
from time to time the Company shall determine to register any of its
securities, either for its own account or the account of a security holder or
holders, other than (i) a registration relating solely to employee benefit
plans on Form S-8 (or any successor form), (ii) a registration relating
solely to a Commission Rule 145 transaction on Form S-4 (or any successor
form) or (iii) a registration on Form S-3 relating to a "Rights Offering" of
the Company's Series N Preferred Stock, the Company will:
(a) promptly give to the Investor written notice thereof; and
(b) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 15 days after receipt by the
Investor of such written notice from the Company described in Section 3.1(a).
3.2 Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Investor as a part of the written notice given
pursuant to Section 3.1(a). In such event, the right of the Investor to
registration pursuant to this Article 3 shall be conditioned upon the
Investor's participation in such underwriting and the inclusion of the
Investor's Registrable Securities in the underwriting to the extent provided
herein. If the Investor proposes to distribute its securities through such
underwriting, it shall (together with the Company) enter into an underwriting
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agreement in customary form with the managing underwriter selected for such
underwriting by the Company.
(a) Notwithstanding any other provision of this Article 3, if
the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may
exclude some or all Registrable Securities from such registration and
underwriting. The Company shall so advise the Investor, and the number of
shares of Common Stock to be included in such registration shall be allocated
as follows: first, for the account of the Company, all shares of Common Stock
proposed to be sold by the Company; second, for the account of the Investor
participating in such registration, the number of shares of Common Stock
requested to be included in the registration by the Investor at the time of
filing the registration statement, and third, for the account of any other
shareholders of the Company participating in such registration, the number of
shares of Common Stock requested to be included in the registration by such
other shareholders in proportion, as nearly as practicable, to the respective
amounts of Common Stock that are proposed to be offered and sold by such
other shareholders of Common Stock at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting by
reason of the underwriters' marketing limitation shall be included in such
registration.
(b) The Company shall advise the Investor of any such
limitation and of the number of shares of Registrable Securities held by the
Investor that may be included in the registration and underwriting at the
time of filing the registration statement. If the Investor disapproves of
the terms of any such underwriting, the Investor may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. Any
securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
(c) The Company shall have the right to terminate or withdraw
any registration initiated by it under this Article 3 prior to the
effectiveness of such registration, whether or not the Investor has elected
to include securities in such registration.
ARTICLE 4
REGISTRATION ON FORM S-3
4.1 Request for Registration.
(a) In addition to the rights set forth in Articles 2 and 3
hereof, if the Investor requests that the Company file a registration
statement on Form S-3 (or any successor to Form S-3) for a public offering of
shares of Registrable Securities in which the reasonably anticipated
aggregate price to the public, net of underwriting discounts and fees, would
exceed $500,000 and the Company is a registrant entitled to use Form S-3 (or
any successor form to Form S-3) to register such shares for such an offering,
the Company shall use its best efforts to cause such shares to be registered
for the offering as soon as practicable on Form S-3 (or any such successor
form to Form S-3).
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Article 4:
(i) in any particular jurisdiction in which the Company
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would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(ii) more than once in any twelve-month period.
(c) Subject to the foregoing clauses (i) and (ii), the
Company shall file a registration statement on Form S-3 covering the
Registrable Securities so requested to be registered as soon as practicable
after receipt of the request of the Investor; provided, however, that if the
Company shall furnish to the Investor a certificate signed by the chief
executive officer of the Company stating that in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders, as the result of a pending corporate
transaction, for such registration statement to be filed on or before the
date filing would be required, and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to
defer such filing for a period of not more than 90 days after receipt of the
request of the Investor (provided, however, that the Company shall not be
permitted to exercise such deferral right under this Section 4.1(c) or
Section 2.1(b) hereof more than once in any 365-day period).
4.2 Underwriting.
(a) The distribution of the Registrable Securities covered by
the registration on Form S-3 shall be effected by means of the method of
distribution selected by the Investor. If such distribution is effected by
means of an underwriting, the right of the Investor to registration pursuant
to this Article 4 shall be conditioned upon the Investor's participation in
such underwriting, if any, and the inclusion of the Investor's Registrable
Securities in such underwriting.
(b) If the distribution of the Registrable Securities
pursuant to this Section 4.2 is effected by means of an underwriting, the
Company and the Investor shall enter into an underwriting agreement in
customary form with a managing underwriter of nationally recognized standing
selected for such underwriting by the Investor. Notwithstanding any other
provision of this Article 4, if the managing underwriter advises the Investor
in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the underwriters may exclude some or all of
the shares requested to be included in such registration, provided, however,
that the Investor shall have first claim on the number of shares of
Registrable Securities that may be included in the registration. No
Registrable Securities excluded from the underwriting by reason of the
managing underwriter's marketing limitation shall be included in such
registration.
(c) If the distribution of the Registrable Securities
pursuant to this Section 4.2 is effected by means of an underwriting and if
the Investor disapproves of the terms of the underwriting, the Investor may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter. The Registrable Securities and/or other securities so withdrawn
shall also be withdrawn from registration.
4.3 Inclusion of Shares by Company. If the distribution of the
Registrable Securities pursuant to this Article 4 is effected by means of an
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underwriting and if the managing underwriter has not limited the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account or for the account of others in such registration if the
managing underwriter so agrees and if the number of Registrable Securities
held by the Investor requesting registration on Form S-3 which would
otherwise have been included in such registration and underwriting will not
thereby be limited. The inclusion of such shares shall be on the same terms
as the registration of shares held by the Investor requesting such
registration. In the event that the underwriters exclude some of the
securities to be registered on Form S-3, the securities to be sold for the
account of the Company and any other holders shall be excluded in their
entirety prior to the exclusion of any Registrable Securities held by the
Investor.
ARTICLE 5
EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Articles 2, 3 or 4 shall be borne by
the Company. Selling Expenses attributable to the sale of Registrable
Securities by the Investor shall be borne by the Investor.
ARTICLE 6
REGISTRATION PROCEDURES
In the case of each registration or qualification effected by the
Company pursuant to this Agreement, the Company will keep the Investor
advised in writing as to the initiation of each registration and
qualification and as to the completion thereof. At its expense, the Company
will:
(a) Keep such registration or qualification effective and
current for a period of 180 days (or such longer period as may be necessary
to accommodate the filing of amendments or supplements necessary to comply
with the Securities Act) or until the Investor has completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(b) Furnish such number of prospectuses and other documents
incident thereto as the Investor from time to time may reasonably request;
(c) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as shall be reasonably requested by the
Investor or any managing underwriter for the distribution of the
Registrable Securities covered by the registration statement; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdiction;
(d) Use its best efforts to cause all Registrable Securities
covered by the registration statement to be listed or accepted for quotation
on a national securities exchange or automated quotation system;
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. The
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Investor participating in such underwriting shall also enter into and perform
its obligations under such an agreement;
(f) Subject to receiving reasonable assurances of confidentiality,
for a reasonable period after the filing of such registration statement, and
throughout each period during which the Company is required to keep a
registration effective, make available for inspection by the Investor, and
any underwriters, and their respective counsel, such financial and other
information and books and records of the Company, and cause the officers,
directors, employees, counsel and independent certified public accountants of
the Company to respond to such inquiries as shall be reasonably necessary, in
the judgment of such counsel, to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act;
(g) Notify the Investor, at any time when a prospectus
relating thereto covered by such registration statement is required to be
delivered under the Securities Act, of the occurrence of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(h) Promptly notify the Investor and any underwriters, and
confirm such advice in writing, (i) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same has
become effective, (ii) of any comments by the Commission, by the National
Association of Securities Dealers Inc. ("NASD"), and by the blue sky or
securities commissioner or regulator of any state with respect thereto or
any request by any such entity for amendments or supplements to such
registration statement or prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness
of such registration statement or the initiation or threatening of any
proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company cease to be true and correct in all material
respects, and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities
covered by the registration statement for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
ARTICLE 7
INDEMNIFICATION
7.1 The Company will indemnify the Investor, each of its officers,
directors, members, partners, shareholders, employees and agents, and each
person controlling any such persons within the meaning of Section 15 of the
Securities Act, with respect to which registration or qualification has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or
based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular
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or other document, or any amendment or supplement thereof, incident to any
such registration or qualification, or (ii) any omission (or alleged
omission) to state therein, a material fact required to be stated therein or
necessary to make the statements therein, not misleading, or (iii) any
violation (or alleged violation) by the Company of any rule or regulation
promulgated under the Securities Act or any state securities laws applicable
to the Company and relating to action or inaction by the Company in
connection with any such registration or qualification, and will reimburse
the Investor, each of its officers, directors, members, partners,
shareholders, employees and agents, and each person controlling any such
persons, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by the
Investor or underwriter and expressly intended for use in such registration
statement, prospectus, offering circular or other document, or any amendment
or supplement thereof. Expenses (including attorneys' and accountants' fees)
incurred in defending a civil or criminal claim, action, suit, or proceeding
shall be paid by the Company in advance of the final disposition of the
matter upon receipt of an undertaking satisfactory to the Company by or on
behalf of any person or entity entitled to indemnification pursuant to this
Section 7.1 to repay such amount if such person or entity is ultimately
determined not to be entitled to indemnity.
7.2 The Investor will, if Registrable Securities held by the
Investor are included in the securities as to which such registration or
qualification is being effected, indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered
by such a registration statement, and each person who controls the Company or
such underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance or (ii) any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
the Company, such directors, officers, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability
or action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular, other document or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Investor
and expressly intended for use in such registration statement, prospectus,
offering circular or other document, or any amendment or supplement thereof;
provided, however, that the obligations of the Investor hereunder shall be
limited to an amount equal to the net proceeds to the Investor from the sale
of Registrable Securities sold pursuant to registration as contemplated
herein.
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7.3 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 Party to assume the defense of any such
claim or any litigation resulting therefrom, provided 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 unreasonably be withheld. The Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due
to actual or potential conflicts of interest. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Agreement, unless such failure is
materially prejudicial to the ability of the Indemnifying Party to defend the
action. 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.
7.4 If the indemnification provided for in Section 7.1 or 7.2 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in
Section 7.1 or 7.2, in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the sellers of Registrable
Securities on the other hand in connection with statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) or expenses, as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the sellers
of Registrable Securities and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Investor agree that it would not be just and
equitable if contributions pursuant to this Section 7.4 were to be determined
by pro rata allocation (even if all sellers of Registrable Securities 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 first sentence of this Section 7.4. The amount paid by an Indemnified
Party as a result of the expenses, claims, losses, damages or liabilities (or
actions or proceedings in respect thereof) referred to in the first sentence
of this Section 7.4 shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any claim, action or proceeding which is the
subject of this Section 7.4. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of sellers of Registrable Securities to
contribute pursuant to this Section 7.4 shall be several in proportion to the
respective amount of Registrable Securities sold by them pursuant to a
registration statement.
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ARTICLE 8
INFORMATION BY INVESTOR
The Investor holding Registrable Securities included in any registration
shall furnish in writing to the Company such information regarding the
Investor and the distribution proposed by the Investor as the Company may
reasonably request in writing and as shall be reasonably required in
connection with any registration or qualification referred to in this
Agreement.
ARTICLE 9
RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
securities of the Company to the public without registration, at such time as
a public market exists for the Common Stock of the Company, the Company
agrees to:
9.1 Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times;
and
9.2 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 Securities Exchange Act of 1934, as amended (the
"Exchange Act"), at any time that it is subject to such reporting
requirements; and
9.3 So long as the Investor owns any Registrable Securities,
furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule
144, and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as the Investor may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Investor to
sell any such securities without registration.
ARTICLE 10
TRANSFER OF REGISTRATION RIGHTS
The rights to cause the Company to register securities granted to the
Investor under Articles 2, 3 and 4 hereof may be assigned in connection with
any permitted transfer or assignment of the Investor's Registrable
Securities. All transferees and assignees of the rights to cause the Company
to register securities granted to the Investor under Articles 2, 3 and 4
hereof, as a condition to the transfer of such rights, shall agree in writing
to be bound by the agreements set forth herein.
ARTICLE 11
LIMITATIONS ON REGISTRATION RIGHTS
GRANTED TO OTHER SECURITIES
11.1 Existing Registration Rights. The Company covenants, warrants
and represents that:
(a) The registration rights of the Company's Class B
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Preferred Stock ("Class B"), Class C Preferred Stock ("Class C") and Series
D Preferred Stock ("Series D") are subordinated in all respects to the rights
of holders of the Series M Preferred in any offering made under Articles 2,
3 or 4 herein. The registration rights of holders of the Company's capital
stock acquired after the date hereof shall be subordinated in all respects to
the rights of holders of the other Registrable Securities in any offering
made under Articles 2, 3 or 4 herein.
(b) If holders of Class B, Class C and/or Series D shares
request registration under circumstances similar to those in Articles 2, 3 or
4 hereof (a "Requested Registration"), the Company shall:
(i) promptly give to the Investor written notice thereof;
(ii) include in any Requested Registration (and any
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 15 days after receipt of such
written notice from the Company described in Section 11.1(b)(i) by the
Investor;
(iii) pay any Registration Expenses related to the Registrable
Securities included in the Requested Registration; and
(iv) upon expiration of the 15-day period prescribed in
Section 11.1(b)(ii), promptly give each holder of Class B, Class C and/or
Series D written notice of the number of Registrable Securities to be
included in the Requested Registration and that if the underwriters exclude
some of the securities to be registered, the securities to be sold for any
Class B, Class C or Series D holder shall be excluded in their entirety prior
to the exclusion of any Registrable Securities.
11.2 Additional Registration Rights. The parties hereto agree that
additional holders of capital stock of the Company providing new financing to
the Company may, in connection with the Company's obtaining such new
financing, be granted registration rights subordinate to those granted
herein, with respect to any or all securities of the Company held by them;
provided, however, that from and after the date of this Agreement, the
Company shall not without the prior written consent of the Investor, enter
into any agreement with any holder or prospective holder of any securities of
the Company providing for the grant to such holder of registration rights
superior to those granted herein.
ARTICLE 12
MISCELLANEOUS
12.1 Aggregation. Shares of capital stock of the Company owned by
partnerships and corporations having substantially common ownership interests
or managed by the same principals and owned by individual investors
affiliated with one another may be aggregated for the purposes of calculating
the aggregate percentage of capital stock of the Company owned by the
Investor and any permitted transferee hereunder.
12.2 Waivers and Amendments. With the written consent of the
Company and the Investor, the obligations and rights of the Company and the
Investor under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
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specified period of time or indefinitely) or amended. This Agreement or any
provision hereof may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought, except to the extent
provided in this Section 12.2.
12.3 Damages. The Company recognizes and agrees that the Investor
will not have an adequate remedy if the Company fails to comply with the
provisions of this Registration Rights Agreement regarding registration and
that damages will not be readily ascertainable, and the Company expressly
agrees that, in the event of such failure, the Company shall not oppose an
application by the Investor, or any other person entitled to the benefits of
these provisions, requiring specific performance of any provisions hereof or
enjoining the Company from continuing to commit any such breach of such
provisions.
12.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed entirely within the state without regard
to principles of conflicts of law.
12.5 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
12.6 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
12.7 Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be deemed effectively
given and received upon delivery in person, or one business day after
delivery by national overnight courier service or by telecopier transmission
with acknowledgment of transmission receipt, or three business days after
deposit via certified or registered mail, return receipt requested, in each
case addressed as follows:
if to the Company:
I-Link Incorporated
00000 Xxxxx Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, President
Telecopier: 000-000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
00 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopier: (000) 000-0000
if to the Investor, at the address shown in the records of the
Company.
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or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
12.8 Severability. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
12.9 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
constitute one instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
I-LINK INCORPORATED
By: /s Xxxx Xxxxxxx
Xxxx Xxxxxxx, President
WINTER HARBOR, L.L.C.
By: First Media, L.P., its General Manager/Member
By: First Media Corporation, its sole General
Partner
By: /s Xxxxx X. Xxxxx Xx.
Xxxxx X. Xxxxx Xx., Secretary
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