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EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is dated as of
________________ __, 200__, by and between SONUS COMMUNICATION HOLDINGS, INC., a
Delaware corporation (the "COMPANY"), the Principal Stockholders (within the
meaning of the Merger Agreement defined below), and the stockholders of Empire
One Telecommunications, Inc., a New York corporation, who agree to be bound by
this Agreement listed on Schedule A attached hereto and incorporated by
reference herein (each a "STOCKHOLDER" and collectively, the "STOCKHOLDERS").
WHEREAS, pursuant to the terms of that certain Merger Agreement of even
date herewith by and between the Company, EOT Acquisition Corporation, a
Delaware corporation ("Acquisition"), Empire One Telecommunications, Inc., a New
York corporation ("Empire One"), the Stockholder and certain other stockholders
of Empire One (the "MERGER AGREEMENT"), the Stockholder will receive, pursuant
to the conditions of the Merger Agreement, _________ shares of the Company's
Common Stock, par value $.0001 per share (the "COMMON STOCK") upon the
consummation of the merger of Empire One into Acquisition (the "Merger"); and
WHEREAS, in order to induce the Stockholder to enter into the Merger
Agreement and/or vote for the Merger contemplated thereby, the Company desires
to grant registration rights to the Stockholder for the shares of Common Stock
to be received in the Merger in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS. As used herein the following defined terms shall have the
following respective meanings:
(a) "CAPITAL STOCK" means the Company's Common Stock and any other
class of common stock created by the Company in the future.
(b) "COMMON STOCK" has the meaning set forth in the Recitals.
(c) "HOLDERS" means any person or entity to whom shares of Capital
Stock were issued pursuant to the Merger Agreement and which agrees to be
bound by this Agreement.
(d) "INDEMNIFIED PARTY" has the meaning set forth in subparagraph
6(c).
(e) "INDEMNIFYING PARTY" has the meaning set forth in subparagraph
6(c).
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(f) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement
in compliance with the Securities Act.
(g) "REGISTRABLE SECURITIES" means all shares of Capital Stock of
the Company issued pursuant to the Merger Agreement.
(h) "SEC" means the Securities and Exchange Commission.
(i) "SECURITIES ACT" means the Securities Act of 1933, as amended.
2. RESERVED.
3. COMPANY REGISTRATION.
(a) If the Company, at any time after the completion of the next
registration of Capital Stock under the Securities Act to occur following
the date hereof, shall determine to register any of its securities,
either for its own account or the account of a security holder or
holders, in a registration statement covering the sale of Capital Stock
to the general public pursuant to an underwritten public offering (except
with respect to any registration filed on Form X-0, Xxxx X-0 or any
successor forms thereto), the Company will: (i) give to each Holder
written notice thereof at least 45 days before filing; provided, however,
in the case of a Registration Statement on Form S-3, the Company shall be
required to give each Holder written notice of the proposed filing
thereof promptly after a decision to make such filing has been made and
in no event less than ten business days prior to filing; and (ii) use its
best efforts to include in such registration (and any related
qualification under blue sky laws) and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within 15 days after receipt of such written notice from
the Company, or, in the case of a Registration Statement on Form S-3,
within seven business days after receipt of such written notice, by any
Holder or Holders, except as set forth in subparagraph 3(b) below. The
notice referred to in this subparagraph shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws.
(b) The right of any Holder to registration pursuant to this
Paragraph 3 shall be conditioned upon such Holder's participation in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together
with the Company) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by
the Company, and may, at their option, require that any or all the
representations and warranties by, and the covenants and other agreements
on the part of, the Company to and for the benefit of such underwriter
shall also be made to and for the benefit of such Holders. Such Holders
shall not be required to make any representations or warranties to or
agreements with the Company or the underwriter other than those relating
to such Holders, their Registrable Securities and their intended methods
of distribution and information about such Holders provided by such
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Holders for use in the registration statement. Upon the written request
of the managing underwriter of any underwritten offering of the Company's
securities, a Holder of Registrable Securities shall not sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any Registrable Securities (other than those included in such
registration) without the prior written consent of such managing
underwriter for a period (not to exceed 30 days before the effective date
and 75 days thereafter) that such managing underwriter reasonably
determines is necessary in order to effect the underwritten public
offering. Notwithstanding any other provision of this Paragraph 3, if the
underwriter determines that marketing factors require a limitation of the
number of shares to be underwritten, the Company shall so advise all
Holders of Registrable Securities which would otherwise be registered and
underwritten pursuant hereto, and the Company shall include in such
registration first the number of shares requested to be sold by the
Company together with the number of shares requested to be sold by the
persons and entities exercising demand registration rights with respect
to such registration, if any, then the number of shares of Registrable
Securities requested to be included in the registration which, in the
opinion of such underwriter, can be sold, pro rata among all Holders
thereof and all other shareholders of the Company that have contractual
rights with respect to the registration of shares of Capital Stock held
by such shareholders (the "Other Holders") in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by
such Holders and Other Holders at the time of filing the registration
statement, with further proportional allocations among the Holders and
Other Holders if any such Holder or Other Holder has requested less than
all such Registrable Securities it is entitled to register.
4. EXPENSES OF REGISTRATION. All expenses incurred in connection with any
registration or qualification pursuant to this Agreement, including,
without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company, and
expenses and fees of any special audits incidental to or required by such
registration, shall be borne by the Company; provided, however, that the
Company shall not be required to pay fees of legal counsel of the
Holders, or underwriters' discounts or commissions relating to
Registrable Securities (such underwriters' fees, discounts or commissions
to be borne by the Holders, on a pro rata basis, based on the number of
shares of Registrable Securities sold by each of them).
5. REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will keep each Holder
participating therein advised in writing as to the initiation of such
registration (and any state qualifications) and as to the completion
thereof. The Company may decline to file a Registration Statement after
giving notice to each Holder, or withdraw any registration after filing
and after such notice, but prior to the effectiveness thereof, provided
that the Company shall promptly notify each Holder in writing of any such
action and provided further that the Company shall bear all expenses
incurred by such Holder or otherwise in connection with such withdrawn
registration. Upon receipt of written notice from the Company that a
registration statement or prospectus contains a Misstatement (as defined
below), each Holder of Registrable Securities shall forthwith discontinue
disposition of Registrable Securities until such Holder has received
copies of the supplemented or amended prospectus, or until such Holder is
advised in writing by the Company that the use of the
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prospectus may be resumed, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable
Securities, each of the Holder's officers, directors, partners and
employees, and each person controlling such Holder, with respect to such
registration or qualification effected pursuant to this Agreement and in
which Registrable Securities of the Holders are included, against all
claims, losses, damages, and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, registration
statement or other document incident to any such registration or
qualification, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by the
Company of any rule or regulation promulgated pursuant to any Federal,
state or common law rule or regulation including, without limitation, the
Securities Act, applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration, qualification or compliance and will reimburse each such
Holder, each of the Holder's officers, directors, partners and employees,
and each person controlling such Holder, for any legal and any other
reasonable expenses incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, including
reasonable attorneys' fees and expenses; provided, however, that the
Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon and in conformity with written
information furnished to the Company by such Holder. Such indemnity shall
be effective notwithstanding any investigation made by or on behalf of
any Holder or any such officer, director, partner, employee, or
controlling person and shall survive any transfer by the same of the
Registrable Securities. The foregoing notwithstanding, the Company shall
not be liable to the extent that any such claim, loss, damage or
liability arises out of or is based upon an untrue statement of a
material fact or an omission to state a material fact required to be
stated in a registration statement or prospectus or necessary to make the
statements in a registration statement, prospectus or preliminary
prospectus not misleading (a "Misstatement") or alleged Misstatement made
in any preliminary prospectus if (i) such Holder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale of Registrable Securities giving rise to such
claim, loss, damage or liability and (ii) the prospectus would have
corrected such Misstatement. In addition, the Company shall not be liable
to the extent that any such claim, loss, damage or liability arises out
of or is based upon a Misstatement or alleged Misstatement in a
prospectus, (i) if such Misstatement or alleged Misstatement is corrected
in an amendment or supplement to such prospectus and (ii) having
previously been furnished by or on behalf of the Company with copies of
the prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such prospectus as so amended or supplemented prior to
or concurrently with the sale to the person who
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purchased a Registrable Security from such Holder and who is asserting
such claim, loss, damage or liability.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration or qualification is being effected, indemnify the Company,
each of its directors, officers and employees, each person who controls
the Company, and each other such Holder, each of such other Holder's
officers, directors, partners and employees, and each person controlling
such other Holder, against all claims, losses, damages and liabilities
(or actions in respect thereto) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus or other document, 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, and will reimburse the Company, such Holders, such directors,
officers, partners, employees or persons for any legal or any other
reasonable expenses incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, including
reasonable attorneys' fees and expenses, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus or other document in reliance upon and in
conformity with written information furnished to the Company by such
Holder. Notwithstanding the foregoing, the liability of any such Holder
shall not exceed an amount equal to the proceeds realized by each such
Holder of Registrable Securities sold as contemplated herein. Such
indemnity shall be effective notwithstanding any investigation made by or
on behalf of the Company, any such director, officer, partner, employee,
or controlling person and shall survive the transfer of such securities
by such Holder.
(c) Each party entitled to indemnification under this Paragraph 6
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought. Unless in the reasonable judgment of the Indemnified Party
a conflict of interest may exist between the Indemnifying Party and the
Indemnified Party, the Indemnifying Party shall be permitted to assume
the defense of any such claim or any litigation resulting therefrom;
provided, however, that in any event counsel for the Indemnifying Party
or Indemnified Party who shall conduct the defense of such claim or
litigation as provided above shall be approved by the other Party (which
approval shall not be unreasonably withheld), and such other Party may
participate in such defense at such Party's expense; provided, further,
that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under
this Paragraph 6 unless such failure shall have had a material adverse
effect on the Indemnifying Party's ability to defend such claim.
(d) The Indemnified Party shall make no settlement of any claim or
litigation which would give rise to liability on the part of the
Indemnifying Party under any indemnity contained in this Paragraph 6
without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed, and no Indemnifying Party
shall make any settlement of any such claim or litigation without the
consent of the Indemnified
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Party, which consent shall not be unreasonably withheld or delayed. If a
firm offer is made to settle a claim or litigation defended by the
Indemnified Party and the Indemnified Party notifies the Indemnifying
Party in writing that the Indemnified Party desires to accept and agree
to such offer, but the Indemnifying Party elects not to accept or agree
to such offer within ten days after receipt of written notice from the
Indemnified Party of the terms of such offer, then, in such event, the
Indemnified Party shall continue to contest or defend such claim or
litigation and, if such claim or litigation is within the scope of the
Indemnifying Party's indemnity contained in this Paragraph 6, the
Indemnified Party shall be indemnified pursuant to the terms hereof. If a
firm offer is made to settle a claim or litigation defended by the
Indemnifying Party and the Indemnifying Party notifies the Indemnified
Party in writing that the Indemnifying Party desires to accept and agree
to such offer, but the Indemnified Party elects not to accept or agree to
such offer within ten days after receipt of written notice from the
Indemnifying Party of the terms of such offer, then, in such event, the
Indemnified Party may continue to contest or defend such claim or
litigation and, in such event, the total maximum liability of the
Indemnifying Party to indemnify or otherwise reimburse the Indemnified
Party in accordance with this Agreement with respect to such claim or
litigation shall be limited to and shall not exceed the amount of such
settlement offer, plus reasonable out-of-pocket costs and expenses
(including reasonable fees and disbursements of counsel) to the date of
notice that the Indemnifying Party desired to accept such settlement
offer.
(e) The indemnification payments required pursuant to this
Paragraph 6 for expenses of the investigation or defense of a claim or
lawsuit shall be made from time to time during the course of the
investigation or defense, as the case may be, upon submission of
reasonably sufficient documentation that any such expenses have been
incurred.
7. INFORMATION BY HOLDER. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such written
information regarding such Holder or Holders and the distribution
proposed by such Holder or Holders as the Company may reasonably request
in writing and as shall be required in connection with any registration
or qualification referred to in this Agreement. The Company agrees to
include in any such registration statement all information concerning the
Holders and their distribution which the Holders shall reasonably
request.
8. CHANGES; WAIVER; ASSIGNMENT. The terms and provisions of this
Agreement may not be modified, amended or assigned, except that they may
be modified, amended or assigned with the written consent of (i) the
Company and (ii) the Holders of a majority of the Registrable Securities
outstanding. None of the terms and provisions of this Agreement may be
waived except in writing by the person so waiving.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without
giving effect to any choice of law or conflict of law provision or rule
(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.
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10. NOTICE. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission
or mailed by prepaid first class certified mail, return receipt
requested, or delivered by a nationally recognized overnight courier
service prepaid, to the parties at the following addresses or facsimile
numbers: If to the Company, to:
Sonus Communication Holdings, Inc.
0000 Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
Telecopier: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxx, III, Esquire
McGuire, Woods, Battle & Xxxxxx LLP
0 Xx. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
If to the Holders, to the address listed as the most recent address of
such Holders on the books and records of Empire One Telecommunications,
Inc.
with a copy to:
Xxxxx X. Xxxxxxxx, Esquire
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: 000-000-0000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided for in this Section, be deemed given upon
receipt, (iii) if delivered by mail in the manner described above to the
address as provided in this Section, be deemed given on the earlier of
the fourth Business Day following mailing or upon receipt and (iv) if
delivered by overnight courier to the address as provided for in this
Section, be deemed given on the earlier of the first Business Day
following the date sent by such overnight courier or upon receipt (in
each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section). Any party from time
to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such
change to the other parties hereto.
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11. TERMINATION. This Agreement shall terminate with respect to any
Holder on the date on which the Holder may sell all of such Holder's
Registrable Securities pursuant to Rule 144 under the Securities Act
within any 90 day period or, with respect to any such Holder, on the date
on which all of such Holder's Registrable Securities have been registered
pursuant to a registration statement filed with the Commission and which
has become effective.
12. Arbitration.
(a) Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association by an arbitration panel consisting of three
persons, one selected by Sonus, one selected by the Principal
Stockholders and the third selected by mutual agreement of the first two
arbitrators selected, and judgement upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
(b) The arbitration shall be held in Washington, D.C. if brought
by Target or any of the Principal Stockholders and in New York City if
brought by Acquisition or Sonus.
(c) All fees, costs and expenses (including reasonable attorneys'
fees and expenses) incurred by a party that prevails on any issue in any
arbitration commenced hereunder or in any judicial proceeding seeking to
enforce this Agreement to arbitrate disputes or seeking to enforce any
order or award of any arbitration hereunder shall be assessed against the
party or parties that do not prevail on such issue or issues.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and which together shall constitute a
single agreement. This Agreement may be delivered by facsimile.
15. HEADINGS. The headings of the Paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute a
part hereof.
16. SEVERABILITY. If any provision or any portion of any provision of
this Agreement shall be held to be void or unenforceable, the remaining
portions of this Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their authorized officers as of the day and year first above
written.
SONUS COMMUNICATION HOLDINGS, INC.
By: /s/ W. Xxxx Xxxxxx
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Name: W. Xxxx Xxxxxx
Title: CEO
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[NAME OF HOLDER]
By:
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Name:
Title:
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