EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the 13th day of July,1999, executed and
delivered by TeleHubLink Corporation, a company incorporated under the laws of
the State of Delaware, having its principal place of business at 24 New England
Executive Park, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), in favor of the Holders
(as defined below).
WHEREAS, pursuant to the terms and conditions set forth in the
Confidential Private Offering Memorandum of the Company, dated June 8, 1999,
including the exhibits thereto, and any and all supplements thereof and
amendments thereto, and all documents incorporated by reference therein
(collectively, the "Memorandum"), the Company is offering for sale (the
"Offering") units ("Units"), each Unit consisting of a 10% Subordinated
Convertible Debenture in the principal amount of $25,000 (the "Debentures"); and
WHEREAS, each of the Debentures provides for the issuance by the
Company of warrants (the "Warrants") to acquire Common Stock of the Company (the
"Warrant Shares"); and
WHEREAS, the Debentures are convertible into shares ("Conversion
Shares") of Common Stock of the Company; and
WHEREAS, pursuant to the terms and conditions set forth in the
Memorandum, including those contained in the subscription agreement
("Subscription Agreement") which has been executed and delivered by or on behalf
of each of the initial purchasers of Units from the Company (the "Initial
Purchasers"), each of the Initial Purchasers is purchasing the Units for which
it has subscribed; and
WHEREAS, the terms and conditions of the Offering provide for the
execution and delivery of this Agreement;
NOW, THEREFORE, in order to induce the Initial Purchasers to purchase
the Units, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by the Company, the Company hereby
agrees as follows:
1. PIGGYBACK REGISTRATION. (a) If, at any time during the five-year
period commencing on the first anniversary of the Initial Closing (as defined in
the Memorandum), the Company proposes to prepare and file one or more
registration statements or amendments, including post-effective amendments, or
supplements thereto covering any of the Company's equity or debt securities held
by the Company or any of its shareholders, in such case other than pursuant to
Form S-8 or successor form (collectively, a "Registration Statement"), it will
give written notice of its intention to do so by registered mail ("Notice"), at
least thirty (30) business days prior to the filing of each such Registration
Statement, to each Person (defined hereafter) who beneficially holds Warrant
Shares, Conversion Shares, Warrants exercisable for Warrant Shares and/or
Debentures convertible into Conversion Shares (such Warrant Shares and
Conversion Shares, including those issued and those issuable upon exercise of
Warrants or conversion of Debentures, collectively referred to herein as
"Registrable Securities") and each of the successors, assigns and transferees of
each of such Persons (individually, a "Holder" and collectively, "Holders").
"Person" as used herein shall mean any individual, sole proprietorships,
partnership, corporation, association, joint venture, trust, unincorporated
entity or other entity, or the government of any country or sovereign state, or
of any state, province, municipality or other political subdivision thereof.
(b) Upon the written request of a Holder or Holders, made within twenty
(20) business days after receipt of the Notice, that the Company include all or
a portion of the Registrable Securities held by such Holders ("Piggyback
Securities") in the proposed Registration Statement (each such Holder, a
"Requesting Holder"), the Company shall use its best efforts to cause such
Registration Statement to be declared effective under the Securities Act of
1933, as amended (the "Act"), by the Securities and Exchange Commission (the
"SEC") so as to permit the public sale by the Requesting Holders of their
Piggyback Securities pursuant thereto, at the Company's sole cost and expense
and at no cost or expense to the Requesting Holders. However, if, in the
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written opinion of the Company's managing underwriter, if any, for the offering
evidenced by such Registration Statement, the inclusion of all or a portion of
the Piggyback Securities, when added to the securities being registered, will
exceed the maximum amount of the Company's securities which can be marketed
either (i) at a price reasonably related to their then-current market value or
(ii) without otherwise materially adversely affecting the entire offering, then
the Company may exclude from such offering all or a portion of the Piggyback
Securities.
(c) If securities are proposed to be offered for sale pursuant to such
Registration Statement by other security holders of the Company and the total
number of securities to be offered by the Requesting Holders and such other
selling security holders is required to be reduced pursuant to a request from
the managing underwriter (which request shall be made only for the reasons and
in the manner set forth above), the aggregate number of Piggyback Securities to
be offered by Requesting Holders pursuant to such Registration Statement shall
equal the number which bears the same ratio to the maximum number of securities
that the underwriter believes may be included for all the selling security
holders (including the Requesting Holders) as the original number of Piggyback
Securities proposed to be sold by the Requesting Holders bears to the total
original number of securities proposed to be offered by the Requesting Holders
and the other selling security holders.
(d) Once effective, the Company covenants and agrees to use its best
efforts to maintain the effectiveness of the Registration Statement until the
earlier of (i) the date that all of the Registrable Securities have been sold
pursuant to a Registration Statement or Rule 144 of the General Rules and
Regulations promulgated under the Act ("Rule 144"), or (ii) the date that the
Holders of the Registrable Securities receive an opinion of counsel to the
Company that all of the Registrable Securities may be freely traded (without
limitation or restriction as to quantity or timing and without registration
under the Act) pursuant to Rule 144 or otherwise, except that, the Company may
suspend the use of the Registration Statement for a period not to exceed 90 days
in any 12-month period for valid business reasons, including the acquisition or
divestiture of assets, public filings with the SEC, pending corporate
developments and similar events.
(e) Anything herein contained to the contrary notwithstanding, the
provisions of this Agreement shall not apply to, and the term "Registrable
Securities" as used in this Agreement shall not include, Warrant Shares or
Conversion Shares after they have been sold by a Holder pursuant to an effective
Registration Statement under the Act or pursuant to Rule 144.
(f) Notwithstanding the provisions of this Section 1, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 1 (irrespective of whether any written request for inclusion of
Piggyback Securities shall have already been made) to elect not to file any such
proposed Registration Statement or to withdraw the same after its filing but
prior to the effective date thereof.
2. ADDITIONAL COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.
The Company covenants and agrees as follows:
(a) In connection with any registration of Registrable Securities
pursuant to Section 1 above, the Company shall furnish each Holder of
Registrable Securities included in a Registration Statement with such reasonable
number of copies of such Registration Statement, related preliminary prospectus
and prospectus meeting the requirements of the Act, and other documents
necessary or incidental to the registration and public offering of such
Registrable Securities, as shall be reasonably requested by the Holder to permit
the Holder to make a public distribution of such Registrable Securities.
(b) If any stop order shall be issued by the SEC in connection
with any Registration Statement filed pursuant to Section 1 above, the Company
will use its best efforts to obtain the removal of such order.
(c) The Company shall pay all costs, fees, and expenses in
connection with all Registration Statements filed pursuant to Section 1 above,
including, without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses; provided, however, that the Holders
shall be solely responsible for the fees of any counsel retained by the Holders
in connection with such registration and any
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transfer taxes or underwriting discounts, commissions or fees applicable to the
Registrable Securities sold by the Holders pursuant thereto.
(d) The Company will use its best efforts to qualify any
Registrable Securities included in a Registration Statement for sale in such
states as the Holders of such securities shall reasonably request, provided that
no such qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to general service of process or to
taxation or qualification as a foreign corporation doing business in such
jurisdiction.
3. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with any Registration Statement covering
Registrable Securities, the Company agrees to indemnify and hold harmless each
Holder, the affiliates of each such Holder, the directors, partners, officers,
employees and agents of each such Holder and each person who controls any such
Holder within the meaning of either the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law 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 a Registration Statement as originally filed or in any
amendment thereof, or in any preliminary Prospectus or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that (i) the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder specifically for inclusion
therein, (ii) the Company will not be liable to any indemnified party under this
indemnity agreement with respect to any Registration Statement or Prospectus to
the extent that any such loss, claim, damage or liability of such indemnified
party results from the use of the Prospectus during a period when the use of the
Prospectus has been suspended, provided that the Holders received prior notice
of such suspension, which notice shall be deemed to have been received by such
Holders within 48 hours after the giving thereof; and (iii) the Company shall
not be liable to any indemnified party with respect to any preliminary
Prospectus to the extent that any such loss, claim, damage or liability of such
indemnified party results from the fact that such indemnified party sold
Registrable Securities to a person as to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or of
the Prospectus as then amended or supplemented in any case where such delivery
is required by the Act, if the loss, claim, damage or liability of such
indemnified party results from an untrue statement or omission of a material
fact contained in the preliminary Prospectus which was corrected in the
Prospectus or in the Prospectus as then amended or supplemented. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have. The Company also agrees to indemnify and provide contribution to each
person who may be deemed to be an underwriter (for purposes of the Act) with
respect to the Registrable Securities ("Underwriters"), their officers and
directors, and each person who controls each such Underwriter, on substantially
the same basis as that of the indemnification of and contribution to the Holders
provided in this Section 3.
(b) By its participation in a Registration Statement, each Holder
shall be deemed to have agreed to indemnify and hold harmless (i) the Company,
(ii) each of its directors, (iii) each of its officers who signs such
Registration Statement and (iv) each person who controls the Company within the
meaning of either the Act or the Exchange Act to the same extent as the
foregoing indemnity from the Company to each such Holder, but only with respect
to written information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have. Each Holder shall also be
deemed to have agreed to indemnify and contribute to each Underwriter, their
officers and directors,
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and each person who controls each such Underwriter, on substantially the same
basis as that of the indemnification of and contribution to the Company provided
in this Section 3. Anything in this Agreement contained to the contrary
notwithstanding, the liability of each Holder for indemnification or
contribution hereunder shall be limited to the amount of proceeds received by
such Holder in the offering giving rise to such liability.
(c) Promptly after receipt by an indemnified party under this
Section 3 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 3, notify the indemnifying party in writing of the
commencement thereof; but the failure so to promptly notify the indemnifying
party will not relieve the indemnifying party from liability under Section 3(a)
or 3(b) hereof unless and to the extent that it is materially prejudiced
thereby. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel (and local
counsel) if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnified party shall not settle or compromise
any action for which it seeks indemnification or contribution hereunder without
the prior written consent of the indemnifying party, which consent shall not be
unreasonably withheld. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in Section 3(a) or
3(b) is unavailable to or insufficient to hold harmless an indemnified party for
any reason, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Registration
Statement which resulted in such losses.
(e) The provisions of this Section 3 shall remain in full force
and effect regardless of any investigation made by or on behalf of any Holder or
the Company or any other persons who are entitled to indemnification pursuant to
the provisions of this Section 3, and shall survive the sale by a Holder of
Registrable Securities pursuant to the Registration Statement.
4. AMENDMENTS. This Agreement may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions of
this Agreement may not be given, unless the Company has obtained the consent of
Holders then holding a majority of the Registrable Securities.
5. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of, and be binding upon, the Company, the Holders and the other persons and
entities described in Section 3 hereof and their
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respective successors, assigns and transferees, including, without limitation
and without the need for an express assignment, subsequent Holders.
6. THIRD PARTY BENEFICIARIES. The Holders from time to time shall each
be a third party beneficiary of the agreements of the Company contained herein.
7. HEADINGS. The headings which are contained in this Agreement are for
the sole purpose of convenience of reference, and shall not limit or otherwise
affect the interpretation of any of the provisions hereof.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York applicable to contracts made and to be wholly performed
therein.
9. NOTICES. All notices and other communications hereunder shall be in
writing (which shall include publication), and shall be made by hand delivery,
registered first-class mail, telecopier or any courier providing overnight
delivery, (i) if to the Company or an Initial Purchaser, at the address set
forth in the Subscription Agreement and (ii) if to a Holder to the address set
forth on the books and records of the Company. All such notices and other
communications shall be deemed to have been duly given upon receipt.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the Company with respect to the subject matter hereof.
11. SEVERABILITY. In the event that any one or more of the provisions
of this Agreement, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions of this Agreement shall not be in any way impaired or
affected thereby.
12. FURTHER ASSURANCES. The Company will from time to time after the
date hereof take any and all actions, and execute, acknowledge and deliver any
and all documents and instruments, at its cost and expense, as any Holder may
from time to time reasonably request in order to more fully perfect or protect
the rights intended to be granted to it hereunder.
13. INTERPRETATION. As used in this Agreement, unless the context
otherwise requires: words describing the singular number shall include the
plural and vice versa; words denoting any gender shall include all genders;
words denoting natural persons shall include corporations, partnerships and
other entities, and vice versa; and the words "hereof", "herein" and
"hereunder", and words of similar import, shall refer to this Agreement as a
whole, and not to any particular provision of this Agreement.
14. WAIVER. The failure of the Company or any Holder to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Agreement or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Agreement.
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IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Agreement as of the date above written:
TELEHUBLINK CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
AGREED:
HOLDER SIGNATURE:
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Print Name of Organization
By:
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(Signature and Title)
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Print Name and Title of
Person Signing
INDIVIDUAL SIGNATURE:
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Signature(s)
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Print Name
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