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EXHIBIT 10.3
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (this "Agreement") is made as of
August 13, 1997, by and among Transcend Telecom, Inc. (the "Company"), the
Investor Members, and the Management Members. Capitalized terms used but not
otherwise defined herein have the meanings set forth in paragraph 8 hereof.
NOW, THEREFORE, in consideration of the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. DEMAND REGISTRATIONS.
(a) Requests for Registration. At any time after the
date hereof and prior to the Company's Initial Public Offering, and subject to
the approval rights granted to Holland under the LLC Agreement and to the LLC
(and, upon the LLC's dissolution, to certain holders of the Company's
securities) under the Stock Purchase Agreement, the holders of a majority of
the Investor Registrable Securities then outstanding may request registration
under the Securities Act of all or any portion of their Registrable Securities
on Form S-1 or any similar long-form registration (a "Long-Form Registration").
After the Company's Initial Public Offering, (i) the holders of a majority of
the Frontenac Registrable Securities then outstanding, the holders of a
majority of the MDCP Registrable Securities then outstanding, and the holders
of a majority of the MSCP Registrable Securities then outstanding may each
request up to two Long-Form Registrations, (ii) the holders of a majority of
the BV Registrable Securities then outstanding and the holders of a majority of
the Management Registrable Securities then outstanding may each request one
Long-Form Registration, and (iii) the holders of at least 5% of the Registrable
Securities then outstanding may request registration under the Securities Act
of all or any portion of their Registrable Securities on Form S-3 or any
similar short-form registration ("Short-Form Registrations") if available;
provided that the aggregate offering value of the Registrable Securities
requested to be registered in any registration under this paragraph 1(a) (any
"Demand Registration") must equal at least $40 million if the registration is
the Company's Initial Public Offering, at least $20 million in any other
Long-Form Registration, and at least $5 million in any Short-Form Registration.
All requests for Demand Registrations shall be made by giving
written notice to the Company (the "Demand Notice"). Each Demand Notice shall
specify the approximate number of Registrable Securities requested to be
registered and the anticipated per share price range for such offering. Within
ten days after receipt of any Demand Notice, the Company shall give written
notice of such requested registration to all other holders of Registrable
Securities and, subject to the provisions of paragraph 1(d) below, shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice.
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(b) Expenses; Withdrawal. The Company shall pay all
Registration Expenses of all holders of Registrable Securities in all Demand
Registrations. A registration shall not count as one of the permitted
Long-Form Registrations until it has become effective or if the holders of
Registrable Securities initially requesting such registration are not able to
register and sell at least 90% of the Registrable Securities requested to be
included in such registration; provided that the Company shall in any event pay
all Registration Expenses in connection with any registration initiated as a
Demand Registration whether or not it has become effective and whether or not
such registration has counted as one of the permitted Long-Form Registrations.
All Long-Form Registrations shall be underwritten registrations unless
otherwise requested by the holders of a majority of the Registrable Securities
included in the applicable Long-Form Registration.
(c) Short-Form Registrations. Demand Registrations shall
be Short-Form Registrations whenever the Company is permitted to use any
applicable short form. After the Company has become subject to the reporting
requirements of the Securities Exchange Act, the Company shall use its best
efforts to make Short-Form Registrations on Form S-3 (or any successor form)
available for the sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company shall
not include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of
the Registrable Securities included in such registration. If a Demand
Registration is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the number of Registrable
Securities and, if permitted hereunder, other securities requested to be
included in such offering exceeds the number of Registrable Securities and
other securities, if any, which can be sold in an orderly manner in such
offering within a price range acceptable to the holders of a majority of the
Registrable Securities initially requesting registration, the Company shall
include in such registration the number which can be so sold in the following
order of priorities: (i) first, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such Registrable
Securities on the basis of the number of shares owned by each such holder, and
(ii) second, other securities requested to be included in such registration.
(e) Restrictions on Long-Form Registrations. The Company
shall not be obligated to effect any Demand Registration which is a Long-Form
Registration within 180 days after the effective date of a previous Demand
Registration which was a Long-Form Registration or a previous registration in
which the holders of Registrable Securities were given piggyback rights
pursuant to paragraph 2 and in which there was no reduction in the number of
Registrable Securities requested to be included. The Company may postpone for
up to 180 days the filing or the effectiveness of a registration statement for
a Demand Registration if the Company's board of directors determines in its
reasonable good faith judgment that such Demand Registration would reasonably
be expected to have a material adverse effect on any proposal or plan by the
Company or any of its Subsidiaries to engage in any acquisition of assets
(other than in the ordinary course of business) or any merger, consolidation,
tender offer, reorganization or similar transaction; provided that in such
event, the holders of Registrable Securities initially requesting such Demand
Registration shall be entitled to withdraw such request and, if such request is
withdrawn, such
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Demand Registration shall not count as one of the permitted Demand
Registrations hereunder and the Company shall pay all Registration Expenses in
connection with such withdrawn registration. The Company may delay a Demand
Registration hereunder only once in any twelve-month period.
(f) Selection of Underwriters. Subject to the approval
rights granted to the LLC (and, upon the LLC's dissolution, to certain holders
of the Company's securities) under the Stock Purchase Agreement, the Board
shall select the investment banker(s) and manager(s) to administer the
offering.
(g) Other Registration Rights. Except as provided in
this Agreement, the Company shall not grant to any Persons the right to request
the Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without
the prior written consent of the holders of a majority of the Investor
Registrable Securities (or, if none, Registrable Securities) then outstanding;
provided that the Company may grant rights to other Persons to participate in
Piggyback Registrations so long as such rights are subordinate to the rights of
the holders of Registrable Securities with respect to such Piggyback
Registrations.
2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company shall give prompt written notice (in any event within three business
days after its receipt of notice of any exercise of demand registration rights
other than under this Agreement) to all holders of Registrable Securities of
its intention to effect such a registration and shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 20 days after the
receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the
holders of Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company shall include in
such registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, and (iii) third, other
securities requested to be included in such registration.
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(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company shall include in such registration
(i) first, the securities requested to be included therein by the holders
requesting such registration and the Registrable Securities requested to be
included in such registration, pro rata among the holders of any such
securities on the basis of the number of securities so requested to be included
therein owned by each such holder, and (ii) second, other securities requested
to be included in such registration.
(e) Selection of Underwriters. If any Piggyback
Registration is an underwritten offering, the selection of the investment
banker(s) and manager(s) to administer such offering shall be approved by the
Board.
(f) Other Registrations. If the Company has previously
filed a registration statement with respect to Registrable Securities pursuant
to paragraph 1 or pursuant to this paragraph 2, and if such previous
registration has not been withdrawn or abandoned, the Company shall not file or
cause to be effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of at least 180 days has elapsed from the effective
date of such previous registration.
3. HOLDBACK AGREEMENTS.
(a) Holders of Registrable Securities. Each holder of
Registrable Securities shall not effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and (i) the 180-day period beginning
on the effective date of the Initial Public Offering in the case of the Initial
Public Offering and (ii) the 90-day period beginning on the effective date of
any other underwritten Demand Registration or any underwritten Piggyback
Registration in which Registrable Securities are included (in each case, except
as part of such underwritten registration), unless in each case the
underwriters managing the registered public offering otherwise agree.
(b) The Company. The Company (i) shall not effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and during the 180-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, and (ii) shall cause
each holder of its Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock, purchased from the Company at any
time after the date of
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this Agreement (other than in a registered public offering or pursuant to Rule
144) to agree not to effect any public sale or distribution (including sales
pursuant to Rule 144) of any such securities during such period (except as part
of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its best efforts
to effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company shall furnish to the
counsel selected by the holders of a majority of the Registrable Securities
covered by such registration statement copies of all such documents proposed to
be filed, which documents shall be subject to the review and comment of such
counsel);
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than 180 days and comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction);
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(e) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the Nasdaq and, if listed on
the Nasdaq, use its best efforts to secure designation of all such Registrable
Securities covered by such registration statement as a Nasdaq "national market
system security" within the meaning of Rule 11Aa2-1 of the Securities and
Exchange Commission or, failing that, to secure Nasdaq authorization for such
Registrable Securities and, without limiting the generality of the foregoing,
to arrange for at least two market makers to register as such with respect to
such Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company,
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to participate in the preparation of such registration or comparable statement
and to require the insertion therein of material, furnished to the Company in
writing, which in the reasonable judgment of such holder and its counsel should
be included;
(l) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, the Company shall use its best efforts promptly to
obtain the withdrawal of such order;
(m) obtain a cold comfort letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by cold comfort letters as the holders of a
majority of the Registrable Securities being sold reasonably request; and
(n) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of the Registrable
Securities.
5. REGISTRATION EXPENSES.
(a) Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of custodians, and fees and disbursements of
counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Persons retained
by the Company (all such expenses being herein called "Registration Expenses"),
shall be borne as provided in this Agreement, except that the Company shall, in
any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the Nasdaq.
(b) Reimbursement of Counsel. In connection with each
Demand Registration and each Piggyback Registration, the Company shall
reimburse the holders of Registrable Securities included in such registration
for the reasonable fees and disbursements of one counsel chosen by the holders
of a majority of the Investor Registrable Securities (or, if none, Registrable
Securities) included in such registration and for the reasonable fees and
disbursements of each additional counsel retained by any holder of Registrable
Securities solely for the purpose of rendering a legal opinion to underwriters
on behalf of such holder in connection with any underwritten Demand
Registration or Piggyback Registration.
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(c) Payment of Certain Expenses by Holders of Registrable
Securities. Underwriting discounts and commissions and transfer taxes relating
to the Registrable Securities included in any registration hereunder, and all
fees and expenses of counsel for any holder of Registrable Securities (other
than fees and expenses to be reimbursed by the Company as set forth in
paragraph (b) above) shall be borne and paid by the holders of such Registrable
Securities.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent
permitted by law, each holder of Registrable Securities, its officers and
directors and each Person that controls such holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company shall
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the
holders of Registrable Securities.
(b) In connection with any registration statement in
which a holder of Registrable Securities is participating, each such holder
shall furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, shall indemnify
the Company, its directors and officers and each Person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any information
or affidavit so furnished in writing by such holder; provided that the
obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such registration
statement.
(c) Any Person entitled to indemnification hereunder
shall (i) give prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification (provided that the failure to
give prompt notice shall not impair any Person's right to indemnification
hereunder to the extent such failure has not prejudiced the indemnifying party)
and (ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume
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the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party shall
not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent shall not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by
or on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the
Company's indemnification is unavailable for any reason such that such
provisions provide the same obligations and benefits to the indemnified party
as those which would have been applicable had the indemnification provisions in
paragraphs 6(a) and (b) been available taking into account all of the
limitations set forth in paragraphs 6(a) and (b).
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No
Person may participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting arrangements;
provided that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties
regarding such holder and such holder's intended method of distribution) or to
undertake any indemnification obligations to the Company with respect thereto,
except as otherwise provided in paragraph 6(b) hereof, or to the underwriters
with respect thereto, except to the extent of the indemnification being given
to the Company and its controlling persons in paragraph 6(a) hereof.
8. DEFINITIONS.
"BV Registrable Securities" means Registrable Securities
derived from or relating to the Class A Units initially issued to BV under the
Investor Purchase Agreement.
"BV" has the meaning ascribed to such term in the Stock
Purchase Agreement.
"Class A Units" has the meaning ascribed to such term in the
LLC Agreement.
"Class B Units" has the meaning ascribed to such term in the
LLC Agreement.
"Common Stock" means the Company's Common Stock, par value
$.01 per share.
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"Executive Purchase Agreements" has the meaning ascribed to
such term in the Stock Purchase Agreement.
"Frontenac" has the meaning ascribed to such term in the Stock
Purchase Agreement.
"Frontenac Registrable Securities" means Registrable
Securities derived from or relating to the Class A Units initially issued to
Frontenac under the Investor Purchase Agreement.
"Holland" means Xxxxx X. Xxxxxxx.
"Initial Public Offering" means a sale of Common Stock to the
public registered under the Securities Act on Form S-1 or any similar form.
"Investor Members" has the meaning ascribed to such term in
the Stock Purchase Agreement.
"Investor Purchase Agreement" means that certain purchase
agreement of even date herewith by and among the LLC and the Investor Members.
"Investor Registrable Securities" means collectively, the BV
Registrable Securities, the Frontenac Registrable Securities, the MDCP
Registrable Securities, and the MSCP Registrable Securities.
"LLC" means Transcend Telecom, L.L.C., a Delaware limited
liability company.
"LLC Agreement" means that certain limited liability company
agreement of even date herewith entered into by and among the members of the
LLC, as amended from time to time according to its terms.
"Management Members" has the meaning ascribed to such term in
the Stock Purchase Agreement.
"Management Registrable Securities" means Registrable
Securities derived from or relating to (i) any Class B Units issued to any
Management Member pursuant to an Executive Purchase Agreement (or any other
Units issued by the LLC to a holder of such Class B Units in exchange
therefor), or (ii) any Tier I Options or Tier II Options issued to any
Management Member pursuant to an Executive Purchase Agreement.
"MDCP" has the meaning ascribed to such term in the Stock
Purchase Agreement.
"MDCP Registrable Securities" means Registrable Securities
derived from or relating to the Class A Units initially issued to MDCP under
the Investor Purchase Agreement.
"MSCP" has the meaning ascribed to such term in the Stock
Purchase Agreement.
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"MSCP Registrable Securities" means Registrable Securities
derived from or relating to the Class A Units initially issued to MSCP under
the Investor Purchase Agreement.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means the Company's 12% Cumulative
Convertible Preferred Stock, par value $.01 per share.
"Registrable Securities" means (i) any Common Stock issued
upon conversion of any Preferred Stock issued with respect to any Class A Units
or Class B Units upon the dissolution and liquidation of the LLC, (ii) any
Common Stock issued upon exercise of any Tier I Options or Tier II Options,
(iii) any Common Stock issued or issuable with respect to the securities
referred to in clauses (i) and (ii) by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization, and (iv) any other Common Stock of the
Company held by any holder of Registrable Securities; provided that with
respect to any Registrable Securities, such securities shall cease to be
Registrable Securities when they have been distributed to the public pursuant
to an offering registered under the Securities Act or sold to the public
through a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule promulgated by the Securities Exchange
Commission then in force). For purposes of this Agreement, a Person shall be
deemed to be the holder of Registrable Securities, and the Registrable
Securities shall be deemed to be outstanding and in existence, whenever such
Person has the right to acquire such Registrable Securities upon conversion of
Preferred Stock held by such Person or upon conversion of Preferred Stock
issuable to such Person upon dissolution and liquidation of the LLC with
respect to Units held by such Person, whether or not such acquisition has
actually been effected, and such Person shall be entitled to exercise the
rights of a holder of such Registrable Securities hereunder.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Stock Purchase Agreement" means that certain stock purchase
agreement of even date herewith by and between the Company and the LLC, as
amended from time to time in accordance with its terms.
"Tier I Options and Tier II Options" have the meanings
ascribed to such terms under the Executive Purchase Agreements.
"Unit" has the meaning ascribed to such term in the LLC
Agreement.
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9. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to its securities which would materially and adversely affect the ability of
the holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement or which would materially
and adversely affect the marketability of such Registrable Securities in any
such registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically, to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for
specific performance and for other injunctive relief in order to enforce or
prevent violation of the provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and the holders of a majority of the
Investor Registrable Securities and the holders of a majority of the Management
Registrable Securities; provided that if any such amendment or waiver would
adversely affect any holder of Registrable Securities relative to the holders
of Investor Registrable Securities or Management Registrable Securities voting
in favor of such amendment or waiver, such amendment or waiver shall also
require the approval of the holders of a majority of the Registrable Securities
held by all holders so adversely affected.
(e) Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable
Securities.
(f) Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
- 12 -
13
(g) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement. Any Management Member may at any
time after the date hereof, with the prior written approval of the LLC and the
Company, become a party to this Agreement by executing a counterpart to this
Agreement agreeing to be bound by the provisions hereof as if such Management
Member were an original signatory hereto (which joinder shall not constitute a
modification, amendment, or waiver hereof).
(h) Descriptive Headings; Interpretation; No Strict
Construction. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a substantive part of this Agreement.
Whenever required by the context, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns, pronouns, and verbs shall include the plural and vice versa.
Reference to any agreement, document, or instrument means such agreement,
document, or instrument as amended or otherwise modified from time to time in
accordance with the terms thereof, and if applicable hereof. The use of the
words "include" or "including" in this Agreement shall be by way of example
rather than by limitation. The use of the words "or," "either" or "any" shall
not be exclusive. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
(i) GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF
DELAWARE SHALL GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS
OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT
AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE
OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
(j) Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given when
(a) delivered personally to the recipient, (b) telecopied to the recipient
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day) if telecopied before 5:00 p.m. Chicago,
Illinois time on a business day, and otherwise on the next business day, or (c)
one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid). Such notices, demands and other
communications shall be sent to the Company at the address set forth below and
to any holder of Registrable Securities at such address as indicated by the
Company's records, or at such address or to the attention of such other person
as the recipient party has specified by prior written notice to the sending
party. The Company's address is:
- 13 -
14
00000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(k) Business Days. If any time period for giving notice
or taking action hereunder expires on a day which is a Saturday, Sunday or
legal holiday in the state in which the Company's chief-executive office is
located, the time period shall automatically be extended to the business day
immediately following such Saturday, Sunday or legal holiday.
(l) Delivery by Facsimile. This Agreement, the
agreements referred to herein, and each other agreement or instrument entered
into in connection herewith or therewith or contemplated hereby or thereby, and
any amendments hereto or thereto, to the extent signed and delivered by means
of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party hereto or to any such
agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto
or to any such agreement or instrument shall raise the use of a facsimile
machine to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of a facsimile
machine as a defense to the formation or enforceability of a contract and each
such party forever waives any such defense.
* * * * *
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15
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
TRANSCEND TELECOM, INC.
By: /s/ XXXXX X. XXXXXXX
--------------------------------
Its: Chief Executive Officer
-------------------------------
/s/ XXXX CROWNE
-----------------------------------
Xxxx Crowne
/s/ XXXXX X. XXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX FAMILY LIMITED
PARTNERSHIP
By: /s/ XXXXX X. XXXXXXX
--------------------------------
Xxxxx X. Xxxxxxx, its general partner
/s/ XXXXXX X. XXXX
-----------------------------------
Xxxxxx X. Xxxx (individually, and on
behalf of Xxxxx X. Xxxx and Xxxxx X. Xxxx)
/s/ XXXXXXXX X. XXXX
-----------------------------------
Xxxxxxxx X. Xxxx
/s/ XXXXX X. XXXX
-----------------------------------
Xxxxx X. Xxxx
/s/ XXXXX X. XXXX
-----------------------------------
Xxxxx X. Xxxx
/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx
16
BATTERY VENTURES IV, L.P.
By Battery Partners IV, L.P.,
its general partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Its: Managing Partner
-------------------------------
BATTERY INVESTMENT PARTNERS IV, LLC
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Its: Manager
-------------------------------
FRONTENAC VII, L.P.
By Frontenac Company, its general partner
By: /s/ XXXXX X. XXXXXXXX, III
--------------------------------
Its: General Partner
-------------------------------
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By Madison Dearborn Partners II, L.P.,
its general partner
By Madison Dearborn Partners, Inc.,
its general partner
By: /s/ XXXXX X. XXXXX, XX.
--------------------------------
Its: Vice President
-------------------------------
17
XXXXXX XXXXXXX CAPITAL PARTNERS III, L.P.
By MSCP III, L.P., its general partner
By Xxxxxx Xxxxxxx Capital Partners III,
Inc.,its general partner
By: /s/ XXXXX X. XXXX
--------------------------------
Its: Vice Chairman
-------------------------------
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Its: Vice Chairman
-------------------------------
MSCP III 892 INVESTORS, L.P.
By MSCP III, L.P., its general partner
By Xxxxxx Xxxxxxx Capital Partners III,
Inc.,its general partner
By: /s/ XXXXX X. XXXX
--------------------------------
Its: Vice Chairman
-------------------------------
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Its: Vice Chairman
-------------------------------
XXXXXX XXXXXXX CAPITAL INVESTORS, L.P.
By MSCP III, L.P., its general partner
By Xxxxxx Xxxxxxx Capital Partners III,
Inc.,its general partner
By: /s/ XXXXX X. XXXX
--------------------------------
Its: Vice Chairman
-------------------------------
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Its: Vice Chairman
-------------------------------
