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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June
30, 1999, is by and among Comm/Net Holding Corporation, a Texas corporation
("Comm/Net Holding"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Teleplus Telecommunications, Inc., an Iowa corporation, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (collectively, the "Stockholders"), and World Access,
Inc., a Delaware corporation ("WAXS").
WHEREAS, pursuant to an Agreement and Plan of Reorganization, dated May
27, 1999 (the "Reorganization Agreement"), between WAXS, WA Telcom Products Co.,
Inc., a Delaware corporation and wholly-owned subsidiary of WAXS ("Buyer"), the
Stockholders, Enhanced Communications Corporation ("Encom"), Long Distance
Exchange Corporation ("LDEC"), Comm/Net Services Corporation ("Comm/Net
Services") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Buyer will acquire certain of the assets (the
"Assets") of Comm/Net Holding, Encom, LDEC and Comm/Net Services;
WHEREAS, the Reorganization Agreement provides that a form of
consideration to be paid to Comm/Net Holding for the Assets shall include shares
of 4.25% Cumulative Junior Convertible Preferred Stock, Series B of WAXS (the
"Preferred Stock"), which are convertible into shares of WAXS common stock, par
value $.01 per share ("WAXS Stock"), pursuant to the terms of the Certificate of
Designation setting forth the rights and preferences of the Preferred Stock;
WHEREAS, promptly following the consummation of the transactions
contemplated by the Reorganization Agreement, Comm/Net Holding will liquidate
and dissolve as a corporation and distribute to the Stockholders all of its
remaining assets (including the Preferred Stock); and
WHEREAS, in the event that the shares of Preferred Stock held by the
Stockholders are converted into shares of WAXS Stock, WAXS has agreed to grant
to the Stockholders certain rights with respect to the sale of the Stockholders'
Registrable Securities (as defined below) in accordance with the terms of this
Agreement;
NOW THEREFORE, for and in consideration of the premises, the mutual
promises herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are acknowledged, the parties agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
initially capitalized terms shall have the following meanings:
(a) "Affiliate" means, with respect to any person, any other
person who, directly or indirectly, is in control of, is controlled by or is
under common control with such person.
(b) "Holder(s)" means the Stockholders who are holders of
Registrable Securities.
(c) "Registrable Securities" means the shares of WAXS Stock
issued to the Stockholders upon the conversion of shares of Preferred Stock held
by the Stockholders, any stock or other securities into which or for which such
shares of WAXS Stock may hereafter be changed, converted
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or exchanged, and any other securities issued to the Holders of such shares of
WAXS Stock (or such shares into which or for which such shares are so changed,
converted or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, merger, consolidation or similar transactions or
events; provided that any such securities shall cease to be Registrable
Securities if (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act (as defined
below) and such securities shall have been disposed of in accordance with the
plan of distribution set forth in such registration statement, (ii) such
securities shall have been transferred pursuant to Rule 144 (as defined below),
(iii) the rights and obligations related thereto under this Agreement shall have
been transferred in violation of Section 9, or (iv) at any time the total number
of Registrable Securities held by the Holder may then be distributed by the
Holder in one transaction pursuant to Rule 144.
(d) "Registration Expenses" means all reasonable expenses
incurred by WAXS in connection with any registration of Registrable Securities
pursuant to this Agreement including, without limitation, the following: (i) SEC
filing fees; (ii) the fees, disbursements and expenses of WAXS's counsel(s) and
accountants in connection with the registration of the Registrable Securities to
be disposed of under the Securities Act; (iii) all expenses of WAXS and its
agents and representatives in connection with the preparation, printing and
filing of the registration statement, any preliminary prospectus or final
prospectus and amendments and supplements thereto and the mailing and delivering
of a reasonable number of copies thereof to any Holders, underwriters and
dealers and all actual expenses incidental to delivery of the Registrable
Securities; (iv) the cost of producing blue sky memoranda (but specifically not
including legal investment or foreign blue sky memoranda); (v) all expenses in
connection with the qualification of the Registrable Securities to be disposed
of for offering and sale under state securities laws; (vi) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Registrable Securities
to be disposed of; (vii) the expenses of WAXS's transfer agent and registrar
appointed in connection with such offering; (viii) all engraving and printing
expenses for the WAXS securities being offered; and (ix) all fees and expenses
payable in connection with the listing of the Registrable Securities on each
securities exchange or inter-dealer quotation system on which a class of common
equity securities of WAXS is then listed.
(e) "Rule 144" means Rule 144 promulgated under the Securities
Act (as defined below), or any successor rule to similar effect.
(f) "SEC" means the United States Securities and Exchange
Commission.
(g) "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute.
2. DEMAND REGISTRATION.
(a) At any time following the date of this Agreement and upon
written notice from a Holder or Holders of at least 51% of the Registrable
Securities in the manner set forth in Section 10(h) hereof requesting that WAXS
effect the registration under the Securities Act of any or all of the
Registrable Securities held by such Holder as described in Section 2(b) (which
notice shall specify the intended method or methods of disposition of such
Registrable Securities), WAXS shall use its reasonable best efforts to effect,
in the manner set forth in Section 5, the registration under the Securities Act
of such Registrable Securities for disposition in accordance with the intended
method or methods of disposition stated in such request; provided that:
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(i) if, prior to receipt of a registration request
pursuant to this Section 2(a), WAXS had commenced a financing plan and
held or identified a date to hold a formal "all hands" meeting with
outside advisors, including an underwriter if such financing plan is an
underwritten offering, and, in the good faith business judgment of
WAXS's underwriter (or outside advisors, if no underwriter), a
registration at the time and on the terms requested could materially
and adversely affect or interfere with such financing plan of WAXS or
its subsidiaries (a "Transaction Blackout"), WAXS shall not be required
to effect a registration pursuant to this Section 2(a) until the
earliest of (A) the abandonment of such offering or (B) sixty (60) days
after the termination of such offering; provided that WAXS shall only
be permitted to delay a requested registration under this Section 2(a),
whether in reliance on this subsection (i) or on subsection (ii) below,
twice during the term of this Agreement.
(ii) if, while a registration request is pending
pursuant to this Section 2(a), WAXS has determined in good faith that
(A) the filing of a registration statement could jeopardize or delay
any contemplated material transaction other than a financing plan
involving WAXS or would require the disclosure of material information
that WAXS had a bona fide business purpose for preserving as
confidential; or (B) WAXS then is unable to comply with SEC
requirements applicable to the requested registration (notwithstanding
its reasonable best efforts to so comply), WAXS shall not be required
to effect a registration pursuant to this Section 2(a) until the
earlier of (A) the date upon which such contemplated transaction is
completed or abandoned or such material information is otherwise
disclosed to the public or ceases to be material or WAXS reasonably is
able to so comply with applicable SEC requirements, as the case may be,
and (B) thirty (30) days after WAXS makes such good-faith
determination; provided that WAXS shall only be permitted to delay a
requested registration under this Section 2(a), whether in reliance on
this subsection (ii) or on subsection (i) above, twice during the term
of this Agreement.
(iii) WAXS shall not be obligated to file more than
one (1) registration statement under the Securities Act relating to a
registration request pursuant to this Section 2(a) and shall not be
obligated in any event if such registration request is for a number of
Registrable Securities which have an aggregate market value less than
$1 million. If such request shall be for an underwritten offering, such
request must be for a number of Registrable Securities which have an
aggregate market value of at least $5 million.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder pursuant to this Section 2
shall not be deemed to have been effected (and, therefore, not requested for
purposes of Section 2(a): (A) if it is withdrawn based upon material adverse
information relating to WAXS that is different from the information (x) known to
the Holder requesting registration at the time of their request for
registration, or (y) promptly disclosed by WAXS to the Holder at the time of
their request for registration; (B) if, when effective, it includes fewer than
ninety (90%) percent of the number of shares of Registrable Securities which
were the subject matter of the request; (C) if after it has become effective
such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason other than a misrepresentation or an omission by such Holder and, as a
result thereof, less than ninety (90%) percent of the Registrable Securities
requested to be registered can be completely distributed in accordance with the
plan of distribution set forth in the related registration statement.
(c) In the event that any registration pursuant to this
Section 2 shall involve, in whole or in part, an underwritten offering, WAXS
shall have the right to designate the underwriter or underwriters, including the
lead managing underwriter of such underwritten offering.
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(d) Holders other than the Holder initiating the demand
pursuant to Section 2(a) and holders of other registrable securities with the
right to participate in a WAXS registration statement shall have the right to
include their shares of Registrable Securities or other registrable securities,
as the case may be, in any registration pursuant to Section 2(a). In connection
with those registrations in which multiple Holders or holders of other
registrable securities with the right to participate in such registration
("piggy-back rights holders") participate, in the event the facilitating
broker/dealer or, in an underwritten offering, the lead managing underwriter
advises that marketing factors require a limitation on the number of shares to
be sold, the number of shares to be included in the sale or underwriting and
registration shall be allocated pro rata among the Holders and the holders
seeking registration pursuant to piggy-back registration rights otherwise
granted by WAXS on the basis of the estimated proceeds from the sale of the
securities covered by such registration.
(e) WAXS shall have the right to cause the registration of
additional securities for sale for the account of WAXS in any registration of
Registrable Securities requested by a Holder pursuant to Section 2(a) which
involves an underwritten offering; provided that WAXS shall not have the right
to cause the registration of such additional securities if such Holder is
advised in writing (with a copy to WAXS) by the lead managing underwriter
designated pursuant to Section 2(c) that, in such firm's good faith opinion,
registration of such securities in addition to those securities included
pursuant to Sections 2(a)-(d) hereof would materially adversely affect the
offering and sale of the Registrable Securities then contemplated by such
Holder.
3. PIGGY-BACK REGISTRATION. At any time during the term of this
Agreement if WAXS proposes to register any of its WAXS Stock or any other of its
common equity securities (but not including debt instruments or preferred stock
convertible into its common equity securities) (collectively, "Other
Securities") under the Securities Act (other than a registration on Form S-4 or
S-8 or any successor form thereto), whether or not for sale for its own account,
in a manner which would permit registration of Registrable Securities for sale
for cash to the public under the Securities Act, it will each such time give
prompt written notice to each Holder of its intention to do so at least ten (10)
days prior to the anticipated filing date of the registration statement relating
to such registration. Such notice shall offer each such Holder the opportunity
to include in such registration statement such number of Registrable Securities
as each such Holder may request. Upon the written request of any such Holder,
made no later than 5:00 p.m. Dallas, Texas time on the fifth (5th) day after the
receipt of WAXS's notice (which request shall specify the number of Registrable
Securities intended to be disposed of and the intended method of disposition
thereof), WAXS shall use its reasonable best efforts to effect, in the manner
set forth in Section 5, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which WAXS has been so requested to register, to the extent required
to permit the disposition (in accordance with such intended methods thereof) of
the Registrable Securities so requested to be registered; provided that:
(a) if at any time after giving written notice of its
intention to register any securities and prior to the effective date of such
registration, WAXS shall determine for any reason not to register or to delay
registration of such securities, WAXS may, at its election, give written notice
of such determination to the Holder and, thereupon, (A) in the case of a
determination not to register, WAXS shall be relieved of its obligation to
register any Registrable Securities in connection with such registration and (B)
in the case of a determination to delay such registration, WAXS shall be
permitted to delay registration of any Registrable Securities requested to be
included in such registration for the same period as the delay in registering
such Other Securities;
(b) if the registration referred to in the first sentence of
this Section 3 is to be an underwritten registration, and the managing
underwriter advises WAXS in writing that, in such firm's
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opinion, such offering would be materially and adversely affected by the
inclusion therein of the Registrable Securities requested to be included
therein, WAXS shall include in such registration: (1) first, all securities WAXS
proposes to sell for its own account ("WAXS Securities") if WAXS Securities are
proposed to be included in such registration, (2) second, up to the full number
of Registrable Securities in excess of the number or dollar amount of WAXS
Securities, which, in the good faith opinion of such managing underwriter, can
be so sold without materially and adversely affecting such offering (and, if
less than the full number of such Registrable Securities, allocated among the
Holders of such Registrable Securities and holders (other than WAXS) of Other
Securities to be included in such registration pursuant to agreements with WAXS
("Other Holders") pro rata on the basis of the net proceeds from the sale
thereof), and (3) third, all other securities proposed to be registered.
Notwithstanding any other provision in this Agreement to the contrary, WAXS
shall not be required to include Registrable Securities in any registration
statement if the inclusion of such Registrable Securities would violate the
provisions of any agreements or arrangements pursuant to which such registration
is being effected or entered into in connection with such registration;
(c) WAXS shall not be required to effect any registration of
Registrable Securities under this Section 3 incidental to the registration of
any of its securities in connection with mergers, acquisitions, dividend
reinvestment plans or stock option or award or other executive or employee
benefit or compensation plans; and
(d) no registration of Registrable Securities effected under
this Section 3 shall relieve WAXS of its obligation to effect a registration of
Registrable Securities pursuant to Section 2 hereof.
4. EXPENSES. WAXS agrees to pay all Registration Expenses with
respect to an offering pursuant to Section 2 and Section 3 hereof (but not any
fees or expenses of counsel to any Holder or the Holders or commissions or
underwriting discount in connection with an offering which shall be the expense
of the Holder(s)).
5. REGISTRATION AND QUALIFICATION. If and whenever WAXS is
required to use its reasonable best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Section 2 or 3
hereof, WAXS shall:
(a) prepare and file a registration statement under the
Securities Act relating to the Registrable Securities to be offered as soon as
practicable, but in no event later than forty-five (45) days (ninety (90) days
if the applicable registration form is other than Form S-3) after the date
notice is given, and use its reasonable best efforts to cause the same to become
effective as promptly as practicable;
(b) prepare and file with the SEC 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
thirty (30) days (or, in the case of an underwritten offering, such shorter time
period as the underwriters may require);
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the Securities Act,
and such other documents, as the Holders or such underwriter may reasonably
request in order to facilitate the public sale of the Registrable Securities,
and a copy of any and all transmittal letters or other correspondence to, or
received from, the SEC or any other
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governmental agency or self-regulatory body or other body having jurisdiction
(including any domestic or foreign securities exchange) relating to such
offering;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such United States jurisdictions as the Holders
or any underwriter of such Registrable Securities shall request, and use its
best efforts to obtain all appropriate registrations, permits and consents
required in connection therewith, and do any and all other acts and things which
may be necessary or advisable to enable the Holders or any such underwriter to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; provided that WAXS shall not for any
such purpose be required to register or qualify generally to do business as a
foreign corporation in any jurisdiction wherein it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(e) in connection with any underwritten offering, (i) use its
reasonable best efforts to furnish an opinion of counsel for WAXS addressed to
the underwriters and each Holder of Registrable Securities included in such
registration (each a "Selling Holder") and dated the date of the closing under
the underwriting agreement (if any) (or if such offering is not underwritten,
dated the effective date of the registration statement), and (ii) use its
reasonable best efforts to furnish a "cold comfort" letter addressed to each
Selling Holder, if permissible under applicable accounting practices, and signed
by the independent public accountants who have audited WAXS's financial
statements included in such registration statement, in each such case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Selling Holders may reasonably request and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements;
(f) immediately notify the Selling Holders in writing (i) at
any time when a prospectus relating to a registration pursuant to Section 2 or 3
hereof 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, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (ii) of any request by the SEC or any other regulatory
body or other body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of the Selling Holders, subject to
Section 4 hereof, prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading;
(g) list all such Registrable Securities covered by such
registration on each national securities exchange and United States inter-dealer
quotation system on which a class of common equity securities of WAXS is then
listed, with expenses in connection therewith to be paid in accordance with
Section 4 hereof; and
(h) furnish unlegended certificates representing ownership of
the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters with expenses therewith to
be paid in accordance with Section 4 hereof.
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6. UNDERWRITING, DUE DILIGENCE.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Agreement, WAXS shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by WAXS and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities and contribution substantially to the
effect and to the extent provided in Section 7 hereof and the provision of
opinions of counsel and accountants' letters to the effect and to the extent
provided in Section 5(e) hereof. The Selling Holders on whose behalf the
Registrable Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, WAXS to and for the
benefit of such underwriters, shall also be made to and for the benefit of such
Selling Holders. Such underwriting agreement shall also contain such
representations and warranties by the Selling Holders on whose behalf the
Registrable Securities are to be distributed as are customarily contained in
underwriting agreements with respect to secondary distributions. Selling Holders
may require that any additional securities included in an offering proposed by a
Holder be included on the same terms and conditions as the Registrable
Securities that are included therein.
(b) In the event that any registration pursuant to Section 3
shall involve, in whole or in part, an underwritten offering, WAXS may require
the Registrable Securities requested to be registered pursuant to Section 3 to
be included in such underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters under such
registration. If requested by the underwriters for such underwritten offering,
the Selling Holders on whose behalf the Registrable Securities are to be
distributed shall enter into an underwriting agreement with such underwriters,
such agreement to contain such representations and warranties by the Selling
Holders and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to the effect and
to the extent provided in Section 7 hereof. Such underwriting agreement shall
also contain such representations and warranties by WAXS and such other person
or entity for whose account securities are being sold in such offering as are
customarily contained in underwriting agreements with respect to secondary
distributions.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act, WAXS shall give, subject to all parties executing confidentiality
agreements with WAXS on terms reasonably acceptable to WAXS, the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of WAXS with its officers
and the independent public accountants who have certified WAXS's financial
statements as shall be necessary, in the opinion of such Holder and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, WAXS agrees to indemnify and hold harmless each
Holder, its officers and directors, managers and members, as the case may be,
each underwriter of Registrable Securities so offered and each person, if any,
who controls any of the foregoing persons within the meaning of the Securities
Act, from and against any and all claims, liabilities, losses, damages, expenses
and judgments, joint or several, to which they or any of them may become
subject, under the Securities Act or otherwise, including any
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amount paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable legal or other
expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as such losses, claims, damages, liabilities or
actions shall arise out of, or shall be based upon, any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or any
amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or 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; provided, however, that WAXS shall not be liable to a
particular Holder in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information relating to such Holder furnished to WAXS in writing by or on behalf
of such Holder specifically for use in the preparation of the registration
statement (or in any preliminary or final prospectus included therein) or any
amendment thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of a
Holder and shall survive the transfer of such securities. The foregoing
indemnity agreement is in addition to any liability which WAXS may otherwise
have to each Holder, its officers and directors, members and managers, as the
case may be, underwriters of the Registrable Securities or any controlling
person of the foregoing; provided, further, that, as to any underwriter or any
person controlling any underwriter, this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus if a copy of a prospectus was not sent or given by or on
behalf of an underwriter to such person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such untrue
statement or omission had been corrected in such prospectus.
(b) In the case of each offering made pursuant to this
Agreement, each Holder of Registrable Securities included in such offering, by
exercising its registration rights hereunder, agrees to indemnify and hold
harmless WAXS, its officers, directors, agents and Affiliates and each person,
if any, who controls any of the foregoing within the meaning of the Securities
Act (and if requested by the underwriters, each underwriter who participates in
the offering and each person, if any, who controls any such underwriter within
the meaning of the Securities Act), from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, to which
they or any of them may become subject under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, and shall promptly reimburse them, as and when incurred, for any
reasonable legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto, or
any omission or alleged omission to state therein a material fact relating to
the Holder required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that such untrue
statement of a material fact is contained in, or such material fact relating to
the Holder is omitted from, information relating to such Holder furnished in
writing to WAXS by or on behalf of such Holder specifically for use in the
preparation of such registration statement (or in any preliminary or final
prospectus included therein). The foregoing indemnity is in addition to any
liability which such Holder may otherwise have to WAXS, or any of its directors,
officers or controlling persons; provided, however, that, as to any underwriter
or any person controlling any underwriter, this indemnity does not apply to any
loss, liability, claim, damage or expense arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission in
any preliminary prospectus if a copy of a prospectus was not sent to or given by
or on behalf of an underwriter to such person asserting such loss, claim,
damage, liability or action at or prior to the
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written confirmation of the sale of the Registrable Securities as required by
the Securities Act and such untrue statement or omission had been corrected in
such prospectus.
(c) Procedure for Indemnification. Each party indemnified
under paragraph (a) or (b) of this Section 7 shall, promptly after receipt of
notice of any claim or the commencement of any action against such indemnified
party in respect of which indemnity may be sought, notify the indemnifying party
in writing of the claim or the commencement thereof; provided that the failure
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) of this Section 7, except to the extent the
indemnifying party was prejudiced by such failure, and in no event shall relieve
the indemnifying party from any other liability which it may have to such
indemnified party. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided that each indemnified party, its officers and
directors, if any, and each person, if any, who controls such indemnified party
within the meaning of the Securities Act, shall have the right to employ
separate counsel reasonably approved by the indemnifying party to represent them
if the named parties to any action (including any impleaded parties) include
both such indemnified party and an indemnifying party or an affiliate of an
indemnifying party, and such indemnified party shall have been advised by
counsel either (i) that there are one or more legal defenses available to such
indemnified party that are different from or additional to those available to
such indemnifying party or such affiliate or (ii) a conflict may exist between
such indemnified party and such indemnifying party or such affiliate, and in
that event the fees and expenses of one such separate counsel for all such
indemnified parties shall be paid by the indemnifying party. An indemnified
party will not enter into any settlement agreement which is not approved by the
indemnifying party, such approval not to be unreasonably withheld. The
indemnifying party may not agree to any settlement of any such claim or action
which provides for any remedy or relief other than monetary damages for which
the indemnifying party shall be responsible hereunder, without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld. In any action hereunder as to which the indemnifying party has assumed
the defense thereof with counsel reasonably satisfactory to the indemnified
party, the indemnified party shall continue to be entitled to participate in the
defense thereof, with counsel of its own choice, but, except as set forth above,
the indemnifying party shall not be obligated hereunder to reimburse the
indemnified party for the costs thereof. In all instances, the indemnified party
shall cooperate fully with the indemnifying party or its counsel in the defense
of each claim or action.
If the indemnification provided for in this Section 7 shall for any
reason be unavailable to an indemnified party in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to herein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party on the one hand
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or the indemnified party on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission, but not by reference to any indemnified party's
stock ownership in WAXS. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this paragraph shall be deemed to include, for purposes of
this paragraph, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
8. RULE 144. WAXS shall take such measures and timely file such
information, documents and reports as shall be required by the SEC as a
condition to the availability of Rule 144 and to remain in compliance with the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
9. TRANSFER OF REGISTRATION RIGHTS. A Holder may not transfer
all or any portion of its rights and obligations under this Agreement to any
transferee without the prior written consent of WAXS, which consent shall not be
unreasonably withheld.
10. MISCELLANEOUS.
(a) Injunctions. Each party acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. Therefore, each party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other remedy to which such
party may be entitled at law or in equity.
(b) Severability. If any term or provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms and provisions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated, and each of the parties shall use its best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term or provision.
(c) Further Assurances. Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
(d) Waivers, etc. No failure or delay on the part of either
party (or the intended third-party beneficiaries referred to herein) in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power preclude
any other or further exercise thereof or the exercise of any other right or
power. No modification or waiver of any provision of this Agreement nor consent
to any departure therefrom shall in any event be effective unless the same shall
be in writing and signed by an authorized officer of each of the parties, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given.
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(e) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties, whether
written or oral, with respect to the subject matter hereof. The paragraph
headings contained in this Agreement are for reference purposes only, and shall
not affect in any manner the meaning or interpretation of this Agreement.
(f) Counterparts. For the convenience of the parties, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original but all of which together shall be one and the same
instrument.
(g) Amendment. This Agreement may be amended only by a written
instrument duly executed by an authorized officer of each of WAXS and the
Holders of at least 51% of the Registrable Securities.
(h) Notices. Unless expressly provided herein, all notices,
claims, certificates, requests, demands and other communications hereunder shall
be in writing and shall be deemed to be duly given (i) when personally
delivered, (ii) if mailed by registered or certified mail, postage prepaid,
return receipt requested, on the date the return receipt is executed or the
letter refused by the addressee or its agent, (iii) if given by telex or
telecopier, once such notice or other communication is transmitted to the telex
or telecopier number specified below and the appropriate answer back or
telephonic confirmation is received; provided that such notice or other
communication is mailed in accordance with clause (ii) hereof or (iv) if sent by
overnight courier which delivers only upon the signed receipt of the addressee,
on the date the receipt acknowledgment is executed or refused by the addressee
or its agent:
if to the Stockholders:
Comm/Net Holding Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
B. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
if to WAXS to:
World Access, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇ ▇▇▇▇▇
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with a copy to:
Long ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: H. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(i) Governing Law. This Agreement is executed by WAXS in, and
shall be construed in accordance with and governed by the laws of the State of
Georgia without giving effect to the principles of conflicts of laws thereof.
(j) Term. This Agreement shall be effective as to each
Stockholder that is a party to this Agreement upon the issuance of any
Registrable Securities to such Stockholder and shall remain in full force and
effect until there are no Registrable Securities outstanding or until terminated
by the mutual agreement of WAXS and the Holders of at least 51% of the
Registrable Securities.
(k) Assignment. Without the prior written consent of WAXS
(which consent shall not be unreasonably withheld), the Stockholders may not
assign their rights, duties or obligations hereunder or any part thereof to any
other person or entity. WAXS may assign its rights and duties hereunder in whole
or in part to one or more entities but if it does so, it shall remain liable for
all of its obligations hereunder. This Agreement, and all of the obligations
hereunder, shall be binding upon and enforceable against all permitted assigns
and transferees.
[Signatures on next page]
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IN WITNESS WHEREOF, the Stockholders and WAXS have caused this
Agreement to be duly executed by their authorized representatives as of the date
first above written.
STOCKHOLDERS:
COMM/NET HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: President
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
TELEPLUS TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: President
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WAXS:
WORLD ACCESS, INC.
By: /s/ W. ▇▇▇ ▇▇▇▇▇
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Name: W. ▇▇▇ ▇▇▇▇▇
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Title: Executive V.P.
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