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EXHIBIT 5
ADDITIONAL INVESTOR REGISTRATION RIGHTS AGREEMENT
This ADDITIONAL INVESTOR REGISTRATION RIGHTS AGREEMENT, dated July 2,
2001 (this "Agreement"), is entered into by and between Z-TEL TECHNOLOGIES,
INC., a Delaware corporation (the "Company"), and each of the "Additional
Investors" (as that term is defined below).
WHEREAS, the Company, the Additional Investors and The 1818 Fund III,
L.P. (the "Fund") (the Fund and the Additional Investors being collectively
referred to as the "Investors") have executed a Stock and Warrant Purchase
Agreement, dated as of July 2, 2001, by and among the Company and the Investors
(the "Stock Purchase Agreement"); and
WHEREAS, the Company and the Fund previously agreed upon the terms and
conditions on which the Company will provide for registration of shares of the
Company's capital stock held by the Fund pursuant to the Fund Registration
Rights Agreement (as defined in the Stock Purchase Agreement); and
WHEREAS, the Company and the Additional Investors wish to agree upon
the terms and conditions on which the Company will provide for registration of
the Conversion Shares and the Warrant Shares;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
I. DEFINITIONS
Capitalized terms used but not defined herein have the meaning assigned
to such terms in the Stock Purchase Agreement.
"Affiliate" means affiliate, as that term is defined under
Rule 144.
"Conversion Shares" means shares of Common Stock issued upon
conversion of the Preferred Shares purchased by the Additional Investors
pursuant the Stock Purchase Agreement.
"Prospectus" means the prospectus included in any Registration
Statement (including without limitation a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including without limitation post-effective
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amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Registrable Securities" means the Conversion Shares and
Warrant Shares that are issued to the Additional Investors, any of their
respective Affiliates or any permitted transferee or designee or upon any stock
split, stock dividend, recapitalization or other distribution with respect to,
conversion or exchange of or in replacement of such shares until, in the case of
any such security, (i) it is registered under the Securities Act and disposed of
in accordance with the Registration Statement covering it, (ii) it is saleable
by the holder thereof pursuant to Rule 144(k) without any volume limitation
applicable thereto, or (iii) it is distributed to the public pursuant to Rule
144.
"Registration Expenses" means all fees and expenses relating
to a Registration Statement incident to the performance of or compliance with
this Agreement by the Company, including without limitation (i) all registration
and filing fees (including without limitation fees and expenses (x) with respect
to filings required to be made with the National Association of Securities
Dealers, Inc. and (y) in compliance with securities or "blue sky" laws
(including without limitation reasonable fees and disbursements of counsel for
the underwriters or selling holders in connection with "blue sky" qualifications
of the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
the managing underwriters, if any, or holders of a majority of the Registrable
Securities being sold may designate)), (ii) printing expenses (including
printing of prospectuses if requested by the holders of a majority of the
Registrable Securities included in any Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) fees and disbursements of independent certified public accountants
of the Company (including the reasonable expenses of any special audit and
"comfort" letters required by or incident to such performance), (vi) fees and
expenses of any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to Section 3 of Schedule E to
the By-laws of the National Association of Securities Dealers, Inc., if any,
(vii) Securities Act liability insurance if the Company so desires such
insurance, (viii) the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange on which similar
securities by the Company are then listed, (ix) fees and expenses of all other
persons retained by the Company, and (x) the reasonable fees and disbursements,
not to exceed a total of $25,000, of not more than one counsel chosen by the
holders of a majority of the Registrable Securities being registered; provided,
however, that Registration Expenses will not include underwriting discounts and
commissions relating to the offer and sale of Registrable Securities, all of
which shall be borne by the holders of such Registrable Securities.
"Registration Statement" means any registration statement
under the Securities Act that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including without limitation the related
Prospectus, all amendments and
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supplements to such registration statement (including post-effective
amendments), all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of equity securities of the Company
outstanding from time to time.
"Underwritten Offering" means a distribution, registered
pursuant to the Securities Act, in which securities of the Company are sold to
an underwriter for reoffering to the public.
1.2 Whenever a number or percentage of Registrable Securities is
to be determined hereunder, each then-outstanding Share that is exercisable to
purchase, convertible into or exchangeable for shares of capital stock of the
Company will be deemed to be equal to the number of shares of Common Stock for
which such Share (or the security into which such Share is then convertible) is
then so purchasable, convertible or exercisable.
II. PIGGYBACK REGISTRATION
2.1 If at any time the Company proposes to file a registration
statement under the Securities Act with respect to an offering of any class of
Shares (other than a registration statement (i) on Form X-0, X-0 or any
successor form thereto or (ii) filed solely in connection with an offering made
solely to employees of the Company, whether or not for its own account), then
the Company will give written notice of such proposed filing to the holders of
Registrable Securities promptly, but in any event at least 15 calendar days
before the anticipated filing date.
2.2 (a) Such notice will offer such holders the opportunity
to register such amount of Registrable Securities for sale, in the same manner
as the manner in which the shares to be registered in such Registration
Statement are to be offered, as each such holder may request (a "Piggyback
Registration"). Subject to Section 2.3 hereof, the Company will include in each
such Piggyback Registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein.
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(b) The holders of Registrable Securities will be
permitted to withdraw all or part of the Registrable Securities from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
(c) The Company will be responsible for all Registration
Expenses related to such Piggyback Registration.
2.3 Priority on Piggyback Registration.
(a) The Company will cause the managing underwriter or
underwriters of a proposed Underwritten Offering to permit holders of
Registrable Securities requested to be included in the registration for such
offering to include therein all such Registrable Securities requested to be so
included on the same terms and conditions as any similar securities, if any, of
the Company included therein.
(b) Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver a statement in writing to
the Company to the effect that the total amount of securities proposed to be
included in such offering is such as to adversely affect the success of such
offering, the number of Registrable Securities included in such offering shall
be reduced, to the extent necessary to reduce the total amount of securities to
be included in such offering to the amount recommended by such managing
underwriter or underwriters, and any securities to be excluded shall come (i)
first, pro rata, on the basis of the number of shares proposed to be registered,
from the holders of Registrable Securities and other participating selling
shareholders who are not holders of Registrable Securities, if any, who are to
offer shares on a "piggyback" basis in such offering, and (ii) after all such
securities are excluded, from the shares to be offered by the Company and any
shareholder or shareholders on whose behalf the secondary registration was
initiated, in accordance with the agreement of such parties.
III. OTHER AGREEMENTS
3.1 Granting of Other Registration Rights. Without the written
consent of the holders of 66% of the then-outstanding Registrable Securities,
the Company will not grant to any person the right to request the Company to
register any equity securities of the Company under the Securities Act in a
manner inconsistent with the provisions of this Agreement.
3.2 Restrictions on Sale by Holders of Registrable Securities.
Each holder of Registrable Securities whose Registrable Securities are covered
by a Registration Statement filed pursuant hereto agrees, and will confirm such
agreement in writing if such holder is so requested (pursuant to a timely
written notice) by the managing underwriter or underwriters in an Underwritten
Offering, not to effect any public sale or distribution of any of the Company's
Shares (except as part of such Underwritten Offering), including a sale pursuant
to Rule 144, during the 90-calendar day period (or
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such shorter period applicable to any officer, director or 5% or greater
stockholder in connection with any underwritten public offering, without regard
to any exception to such agreement granted by the managing underwriter or
underwriters; provided that any such exceptions shall not exceed 500,000 shares
in the aggregate) beginning on the effective date of the Registration Statement
in connection with an Underwritten Offering.
3.3 Registration Procedures. In connection with the Company's
registration obligations pursuant to this Agreement, the Company will:
(a) Prepare and file with the SEC a Registration
Statement or Registration Statements on any appropriate form under the
Securities Act available for the sale of the Registrable Securities by the
holders thereof in accordance with the intended method or methods of
distribution thereof, and cause each such Registration Statement to become
effective; provided, however, that before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, the Company will furnish to
the holders of the Registrable Securities covered by such Registration Statement
copies of all such documents proposed to be filed, and will provide such holders
a reasonable period of time to review and comment on such documents (or have
counsel do the same). The Company will not file any such Registration Statement
or amendment thereto or any Prospectus or any supplement thereto to which the
holders of a majority of the Registrable Securities covered by such Registration
Statement shall reasonably object on a timely basis;
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the required period,
if any; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement as so amended or to such Prospectus as
so supplemented;
(c) Notify the selling holders of Registrable Securities
and their counsel promptly (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of
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the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of any
event which makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in a Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and, in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated or that is necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of any Company determination that a
post-effective amendment to a Registration Statement would be appropriate;
provided that each such selling holder shall cease using such Prospectus or
amendment or supplement thereto immediately upon receipt of written notice from
the Company as to the matters in (ii), (iii), (iv), (v) and (vi) above;
(d) Use every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction, at the
earliest reasonably possible moment;
(e) Furnish to each selling holder of Registrable
Securities and their counsel, without charge, at least one conformed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements (but excluding schedules, all documents incorporated or
deemed incorporated therein by reference and all exhibits, unless requested);
(f) Deliver to each selling holder of Registrable
Securities and their counsel, without charge, as many copies of the Prospectus
or Prospectuses relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such persons
may reasonably request; and the Company hereby consents to the use of such
Prospectus or each amendment or supplement thereto by each of the selling
holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
(g) Register or qualify or cooperate with the selling
holders of Registrable Securities and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
any seller reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdiction of the
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Registrable Securities covered by the applicable Registration Statement;
provided, however, that the Company will not be required to (i) qualify
generally to do business or pay taxes in any jurisdiction in which it is not
then so qualified or so required or (ii) take any action that would subject it
to general service of process in any such jurisdiction in which it is not then
so subject;
(h) Cooperate with the selling holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates will not bear
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as are reasonably requested by the
holders of Registrable Securities;
(i) Cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States except as
may be required solely as a consequence of the nature of such selling holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(j) Upon the occurrence of any event contemplated by
Section 3.3(c)(v) or 3.3(c)(vi) hereof, prepare a supplement or post-effective
amendment to each Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(k) Use its commercially reasonable efforts to cause all
Registrable Securities covered by such Registration Statement to be listed on
each securities exchange, if any, on which similar securities issued by the
Company are then listed;
(l) Make available for inspection by a representative of
the holders of Registrable Securities being sold and any attorney or accountant
retained by such selling holders, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors and employees of the Company and its subsidiaries
to supply all information reasonably requested by any such representative,
attorney or accountant in connection with such Registration Statement; provided,
however, that any records, information or documents that are designated by the
Company in writing as confidential at the time of delivery of such records,
information or documents will be kept confidential by such persons unless (i)
such records, information or documents are in the public domain or otherwise
publicly available, (ii) disclosure of
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such records, information or documents is required by court or administrative
order or is necessary to respond to inquires of regulatory authorities, or (iii)
disclosure of such records, information or documents, in the opinion of counsel
to such person, is otherwise required by law (including without limitation
pursuant to the requirements of the Securities Act); and
(m) Comply with applicable rules and regulations of the
SEC and make generally available to its security holders earning statements
satisfying the provisions of Section 1l(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 calendar days after the end of any 12-month period (or 90 calendar days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company, after the effective
date of a Registration Statement, which statements shall cover said 12-month
period.
3.4 Information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing
and the Company may exclude from such registration the Registrable Securities of
any seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
3.5 Discontinuation of Sales. Each holder of Registrable
Securities will be deemed to have agreed by virtue of its acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 3.3(c)(ii), (iii), (v)
or (vi) hereof, such holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3.3(j) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in such
Prospectus.
3.6 Rules 144 and 144A. The Company will file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner, and will cooperate with any holder of Registrable Securities (including
without limitation by making such representations as any such holder may
reasonably request), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemptions provided by Rules 144 and 144A
(including without limitation the requirements of Rule 144A(d)(4)). Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such filing
requirements.
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3.7 Underwritten Registrations. If any Piggyback Registration is
an Underwritten Offering, the Company will have the right to select the
investment banker or investment bankers and managers to administer the offering.
IV. INDEMNIFICATION
4.1 Indemnification by the Company. The Company will, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each holder of Registrable Securities registered pursuant to
this Agreement, the officers, directors and agents and employees of each of
them, each person who controls such holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) from and against all
losses, claims, damages, liabilities, costs (including without limitation the
costs of investigation and attorneys' fees) and expenses (collectively,
"Losses"), as incurred, but only arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or form of Prospectus or in any amendment or supplement
thereto or in any Preliminary prospectus, or arising out of or based upon 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,
except insofar as the same are based solely upon information furnished in
writing to the Company by such holder expressly for use therein; provided,
however, that the Company will not be liable to any holder of Registrable
Securities to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if either (A) (i) such holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such holder of a Registrable Security to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have completely corrected such untrue statement or alleged untrue statement or
such omission or alleged omission; or (B) such untrue statement or alleged
untrue statement or such omission or alleged omission is completely corrected in
an amendment or supplement to the Prospectus previously furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, and such holder thereafter fails to deliver such Prospectus as so
amended or supplemented prior to or concurrently with the sale of a Registrable
Security to the person asserting the claim from which such Losses arise.
The rights of any holder of Registrable Securities hereunder will not
be exclusive of the rights of any holder of Registrable Securities under any
other agreement or instrument of any holder of Registrable Securities to which
the Company is a party. Nothing in such other agreement or instrument will be
interpreted as limiting or otherwise adversely affecting a holder of Registrable
Securities hereunder and nothing in this Agreement will be interpreted as
limiting or otherwise adversely affecting the holder of Registrable Securities'
rights under any such other agreement or instrument, provided,
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however that no indemnified party will be entitled hereunder to recover more
than its indemnified Losses.
4.2 Indemnification by Holders of Registrable Securities. In
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities will furnish
to the Company in writing such information as the Company reasonably requests
for use in connection with any Registration Statement or Prospectus and will
severally indemnify, to the fullest extent permitted by law, the Company, its
directors and officers, agents and employees, each person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), from and against all Losses arising out of or based upon
any untrue statement of a material fact contained in any Registration Statement,
Prospectus or preliminary prospectus or arising out of or based upon any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or omission is finally judicially determined to have
been contained in any information so furnished in writing by such holder to the
Company expressly for use in such Registration Statement or Prospectus and was
relied upon by the Company in the preparation of such Registration Statement,
Prospectus or preliminary prospectus. In no event will the liability of any
selling holder of Registrable Securities hereunder be greater in amount than the
dollar amount of the proceeds (net of payment of all expenses and underwriter's
discounts and commissions) received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
4.3 Conduct of Indemnification Proceedings. If any person shall
become entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any action or proceeding with respect to which such indemnified
party seeks indemnification or contribution pursuant hereto; provided, however,
that the failure to so notify the indemnifying party will not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced materially by such failure. All fees
and expenses (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) will be paid to
the indemnified party, as incurred, within five calendar days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). The indemnifying party will not consent to entry of any judgment or
enter into any settlement or otherwise seek to terminate any action or
proceeding in which any indemnified party is or could be a party and as to which
indemnification or contribution could be sought by such indemnified party under
this Article IV, unless such judgment, settlement or other termination includes
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance satisfactory to the
indemnified party, from all
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liability in respect of such claim or litigation for which such indemnified
party would be entitled to indemnification hereunder.
4.4 Contribution. If the indemnification provided for herein is
unavailable to an indemnified party under Section 4.1 or 4.2 hereof in respect
of any Losses or is insufficient to hold such indemnified party harmless, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, will, jointly and severally, contribute to the amount paid or payable by
such indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or
indemnifying parties, on the one hand, and such indemnified party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party or indemnifying parties, on the one hand, and
such indemnified party, on the other hand, will 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 of a
material fact, has been taken or made by, or related 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, statement or omission. The amount paid or payable by a party as a result
of any Losses will be deemed to include any legal or other fees or expenses
incurred by such party in connection with any action or proceeding.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section, an indemnifying party that is a
selling holder of Registrable Securities will not be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities sold by such indemnifying party and distributed to the public exceeds
the amount of any damages which such indemnifying party has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 1l(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The provisions of this Article IV will survive so long as Registrable
Securities remain outstanding, notwithstanding any transfer of the Registrable
Securities by any holder thereof or any termination of this Agreement.
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V. MISCELLANEOUS
5.1 Amendments and Waivers; Several Obligations.
(a) The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of holders of at least 80%
of the then-outstanding Registrable Securities. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of holders of Registrable Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other holders of
Registrable Securities may be given by holders of a majority of the Registrable
Securities being sold by such holders; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(b) The execution of this Agreement by the Company and
any Additional Investor shall bind such Additional Investor and the Company,
regardless of whether or how many other Additional Investors have executed this
Agreement. The execution of this Agreement by Additional Investors from time to
time until all of the Additional Investors have executed this Agreement shall
not be deemed an amendment to which Section 5.1(a) applies.
5.2 Owner of Registrable Securities. The Company will maintain, or
will cause its registrar and transfer agent to maintain, a stock book with
respect to the Common Stock, in which all transfers of Registrable Securities of
which the Company has received notice will be recorded. The Company may deem and
treat the person in whose name Registrable Securities are registered in the
stock book of the Company as the owner thereof for all purposes, including
without limitation the giving of notices under this Agreement.
5.3 Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, will be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
5.4 Assignment. Each holder of the Registrable Securities may
assign all or any part of its rights under this Agreement; but only to any
person to whom such Holder sells, transfers, assigns or pledges such Registrable
Securities; provided that, except as to transfers to Affiliates and to the
partners of a Holder that is a limited partnership, the transferee shall receive
the benefit of the assignment of rights under this Agreement only if the
transferee receives at least 100,000 shares of
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Registrable Securities (or other securities or instruments convertible into or
exercisable for at least 100,000 shares of Registrable Securities). In the event
that such holder shall assign its rights pursuant to this Agreement in
connection with the transfer of less than all its Registrable Securities, the
Holder shall also retain its rights with respect to its remaining Registrable
Securities.
5.5 Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it will waive
the defense that a remedy at law would be adequate.
5.6 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and will be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by fax, or (iii)
one business day after being deposited with a reputable next-day courier,
postage prepaid if to the Company, at the address set forth on the signature
page hereto, and if to any holder of Registrable Securities, at the most current
address given by such holder to the Company in accordance with the provisions of
this Section 5.6.
5.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed will be deemed to be an original and all of which taken
together will constitute one and the same instrument.
5.8 Headings. The headings in this Agreement are for convenience
of reference only and will not limit or otherwise affect the meaning hereof.
5.9 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflict of laws principles of such state.
5.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, or inconsistent with any prior right of any person to
require registration of some or all of such person's shares of the Company's
capital stock, the remainder of the terms, provisions, covenants and
restrictions set forth herein will remain in full force and effect and will in
no way be affected, impaired or invalidated, and the parties hereto will use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or unenforceable.
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IN WITNESS WHEREOF, the undersigned have executed this Additional
Investor Registration Rights Agreement as of the day and year first written
above.
Z-TEL TECHNOLOGIES, INC.
By: /s/ D. Xxxxxxx Xxxxx
-----------------------------------------
D. Xxxxxxx Xxxxx
President and Chief Executive Officer
ADDITIONAL INVESTORS
D. XXXXXXX XXXXX
By: /s/ D. Xxxxxxx Xxxxx
-----------------------------------------
Name: D. Xxxxxxx Xxxxx
XXXXXXX XXXXXX
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
FULMEAD VENTURES LIMITED
By: /s/
-----------------------------------------
Name:
Title:
XXXXXXX XXXXXXXXX
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------------
Name: Xxxxxxx XxXxxxxxx
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IN WITNESS WHEREOF, the undersigned have executed this Additional
Investor Registration Rights Agreement as of the day and year first written
above.
N. XXXXX XXXXXXX
By: /s/ N. Xxxxx Xxxxxxx
-----------------------------------------
Name: N. Xxxxx Xxxxxxx
XXXXXXX XXXXX
By: /s/ Xxxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxx
XXXX XXXXXXXX
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxx
15
