EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of April 14, 1999 by and among AVT Corporation, a Washington corporation
("Parent"), and the stockholders of MediaTel Corporation, a Delaware corporation
(the "Company") listed on Exhibit A hereto (the "Stockholders").
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RECITALS
A. Pursuant to the provisions of that certain Agreement and Plan of Merger
dated as of April 13, 1999 (the "Merger Agreement") among Parent, Goldengate
Acquisition Corp., a Delaware corporation ("Merger Sub"), and the Company, the
parties thereto intend to effect the merger of Merger Sub with and into the
Company (the "Merger").
B. To induce the Stockholders to execute and deliver the Merger Agreement
and to consummate the transactions contemplated thereby, Parent desires to
provide to the Stockholders, on the terms and subject to the conditions set
forth herein, certain registration rights under the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws with
respect to certain shares of Parent Common Stock to be issued in the Merger.
C. The execution and delivery of this Agreement is a condition precedent
to the obligations of the parties under the Merger Agreement.
D. Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Merger Agreement.
AGREEMENT
In consideration of the terms hereof, the parties hereto agree as follows:
1. Certain Definitions
As used in this Agreement, the following terms have the following
respective meanings:
"Commission" means the United States Securities and Exchange Commission.
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The terms "register," "registered" and "registration" refer to a
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registration effected by preparing and filing a registration statement on Form
S-3 (or such substitute or replacement form as the Commission shall have then
approved) with the Commission in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
"Registrable Securities" mean the shares of Parent Common Stock to be
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issued to the Stockholders at the Closing of the Merger, excluding those shares
that constitute the Escrow Fund.
"Registration Expenses" mean all expenses, except as otherwise stated
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below, incurred by Parent in complying with Section 2, including, without
limitation, all registration, qualification and filing fees, printing expenses
and fees and expenses of counsel for Parent.
"Selling Expenses" mean all underwriting discounts, selling commissions and
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stock transfer taxes applicable to the resale of the Registrable Securities by
the Stockholders.
"Selling Period" means the period commencing on the date on which the
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registration statement is declared effective by the Commission and ending on the
earlier of (i) the date that is the one year anniversary of the Closing Date and
(ii) the date on which all of the Registrable Securities have been sold or
distributed by the Stockholders.
2. Obligations of Parent
2.1 Required Form S-3 Registration
Parent shall promptly prepare and file with the Commission no later than
thirty (30) days after the Closing Date, a registration statement on Form S-3
(the "Registration Statement") under the Securities Act with respect to the
resale of all the Registrable Securities (including, without limitation,
appropriate qualification under applicable state securities laws).
2.2 Effectiveness; Suspension Right
(a) Parent will use its best efforts to cause the Registration Statement to
become effective under the Securities Act (including without limitation the
filing of any amendments or other documents necessary for such effectiveness)
and to maintain the effectiveness of the Registration Statement and other
applicable registrations and qualifications until the end of the Selling Period,
and from time to time will amend or supplement the Registration Statement and
the prospectus contained therein as and to the extent necessary to comply with
the Securities Act, the Exchange Act and any applicable state securities laws,
subject to the following limitations and qualifications.
(b) During the Selling Period the Stockholders will be permitted to offer
and sell the Registrable Shares registered under the Registration Statement in
the manner described therein, provided that the Registration Statement remains
effective and has not been suspended (and provided further that each Stockholder
complies with any other restrictions on sales of the Registrable Shares that may
be applicable to such Stockholder, such as restrictions on sales by Stockholders
who are affiliates of the Company imposed by certain affiliate agreements being
executed in connection with the Merger, and restrictions on trading
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in Parent's securities applicable to Stockholders who are employees of Parent
or its subsidiaries pursuant to Parent's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy).
(c) Notwithstanding any other provision of this Agreement, Parent shall
have the right at any time to require that all Stockholders suspend further open
market offers and sales of Registrable Shares whenever, and for so long as, in
the reasonable judgment of Parent after consultation with counsel, there is in
existence material undisclosed information or events with respect to Parent (the
"Suspension Right"). In the event Parent exercises the Suspension Right, such
suspension will continue for the period of time reasonably necessary for
disclosure to occur at a time that is not detrimental to Parent and its
shareholders or until such time as the information or event is no longer
material, each as determined in good faith by Parent after consultation with
counsel, provided that the right of the holders of Registrable Shares to effect
open market offers and sales of Registrable Shares pursuant to the Registration
Statement will not be suspended under this Section 2.2(c) for a minimum of
thirty trading days (prorated for partial quarters) during each calendar quarter
(or portion thereof) and for a minimum of half the trading days in the Selling
Period; provided, further, that any such suspension shall apply only for so long
as "affiliates" (as defined in Rule 501 under the Securities Act) of the Parent
are restricted from selling shares of Parent Common Stock. Parent will promptly
give the Stockholders notice of any such suspension and will use all reasonable
efforts to minimize the length of the suspension.
2.3 Expenses of Registration
All Registration Expenses incurred in connection with any registration
pursuant to this Section 2 shall be borne by Parent. All Selling Expenses
relating to Registrable Securities registered on behalf of the Stockholders
shall be borne by the Stockholders, on the basis of the proportion of the number
of Registrable Securities registered and sold by each Stockholder bears to the
total number of Registrable Securities registered and sold. Fees and expenses
of legal counsel, if any, to any Stockholders shall be borne by the Stockholders
who retain such counsel.
3 Procedures for Sale of Shares Under Registration Statement
3.1 Notice and Approval
If any Stockholder shall propose to sell (which may include an intent to
sell over a specific period of time) Registrable Shares pursuant to the
Registration Statement, it shall notify Parent of its intent to do so (including
the proposed manner and timing of all sales) at least two full trading days
prior to such sale, and the provision of such notice to Parent shall
conclusively be deemed to reestablish and reconfirm an agreement by such
Stockholder to comply with the registration provisions set forth in this
Agreement. Unless otherwise specified in such notice, such notice shall be
deemed to constitute a representation that any information previously supplied
by such Stockholder expressly for inclusion in the Registration Statement (as
the same may have been superseded by subsequent such
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information) is accurate as of the date of such notice. At any time within such
two trading-day period, Parent may refuse to permit the Stockholder to resell
any Registrable Shares pursuant to the Registration Statement; provided,
however, that in order to exercise this right, Parent must deliver a certificate
in writing to the Stockholder to the effect that a delay in such sale is
necessary because a sale pursuant to the Registration Statement in its then-
current form without the addition of material, non-public information about
Parent, could constitute a violation of the federal securities laws.
Notwithstanding the foregoing, Parent will ensure that in any event the
Stockholders shall have at least ten trading days (prorated for partial
quarters) available to sell Registrable Shares during each calendar quarter (or
portion thereof) during the Selling Period.
3.2 Delivery of Prospectus
For any offer or sale of any of the Registrable Shares by a Stockholder in
a transaction that is not exempt under the Securities Act, the Stockholder, in
addition to complying with any other federal securities laws, shall deliver a
copy of the final prospectus (or amendment of or supplement to such prospectus)
of Parent covering the Registrable Shares in the form furnished to the
Stockholder by Parent to the purchaser of any of the Registrable Shares on or
before the settlement date for the purchase of such Registrable Shares.
3.3 Copies of Prospectuses
Subject to the provisions of this Section 3, when a Stockholder is entitled
to sell and gives notice of its intent to sell Registrable Shares pursuant to
the Registration Statement, Parent shall, within two trading days following the
request, furnish to such Stockholder a reasonable number of copies of a
supplement to or in amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
prospectus shall not as of the date of delivery to the Stockholder include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statement therein not misleading or
incomplete in the light of the circumstances then existing.
4. Obligations of the Stockholders
4.1 Information
Each Stockholder shall furnish to Parent such additional information
regarding itself, the Registrable Securities (and other securities of Parent, if
any) it holds and the distribution proposed by it as Parent may reasonably
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in Section 2, including the information
requested by the Selling Stockholder Questionnaire attached hereto as Exhibit B,
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which Questionnaire each Stockholder shall complete and execute as a condition
to the inclusion of such Stockholder's shares in the registration statement.
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4.2 Representations and Warranties of the Stockholders
Each Stockholder represents with respect to himself, herself or itself
that:
(a) Good Title. (i) Such Stockholder owns, beneficially and of record, the
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shares of the Company Capital Stock listed opposite such Stockholder's name on
Exhibit A hereto, (ii) such shares of the Company Capital Stock are free and
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clear of any lien, encumbrance, adverse claim, mortgage, pledge, deed of trust,
security interest, charge, restriction on sale or transfer (other than
restrictions imposed by applicable securities laws), preemptive right, option or
other adverse claim or interest of any kind, (iii) such Stockholder has all
necessary power, right and authority to enter into this Agreement and each of
the agreements, certificates, instruments and documents executed or delivered
pursuant to the terms of the Merger Agreement by such Stockholder and to
consummate the transactions contemplated hereby and thereby, and (iv) this
Agreement has been duly authorized, executed and delivered by Stockholder and is
a legal, valid and binding obligation of Stockholder, enforceable in accordance
with its terms.
(b) Commission Documents. Such Stockholder acknowledges that he, she or it
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has received and had the opportunity to review to such Stockholder's
satisfaction the materials disseminated by the Company in connection with the
consent solicitation to approve the Merger and the transactions contemplated
thereby, including Parent's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
(c) Sophistication; Professional Advice. Such Stockholder, either alone or
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with the assistance of his, her or its professional advisors, is a sophisticated
investor, is able to fend for himself, herself or itself in the transactions
contemplated by the Merger Agreement relating to the Parent Common Stock and has
such knowledge and experience in financial and business matters that he, she or
it is capable of evaluating the merits and risks of the prospective investment
in the Parent Common Stock. To the extent he, she or it deems necessary, such
Stockholder has obtained professional advice with respect thereto.
(d) Accredited Investor; Residence. The signature page hereof indicates
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whether such Stockholder is an "accredited investor" as defined in Rule 501(a)
of Regulation D under the Securities Act. For purposes of the application of
state securities laws, such Stockholder is a resident of the state as set forth
on the signature page hereto.
(e) Investment for Own Account. The Parent Common Stock is being acquired
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by such Stockholder for investment for its respective account, not as a nominee
or agent, and not with a view to the distribution of any part thereof.
Stockholder has no present intention of selling, granting any participation in
or otherwise distributing any of the Parent Common Stock in a manner contrary to
the Securities Act or to any applicable state securities laws, nor does
Stockholder have any contract, undertaking, agreement or arrangement with any
Person to sell, transfer or grant a participation to such Person or to any third
party with respect to any of the Parent Common Stock.
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(f) Restricted Securities. Such Stockholder acknowledges that the Parent
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Common Stock has not been and will not prior to issuance be registered under the
Securities Act and that the Parent Common Stock is characterized under the
Securities Act as "restricted securities" and, therefore, cannot be sold or
transferred until such sale or transfer is registered under the Securities Act
as provided in this Agreement or an exemption from such registration is
available. Accordingly, it is understood that the certificates evidencing the
Parent Common Stock may bear the following or a comparable legend:
The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or
applicable state securities laws, and no interest therein may be sold,
distributed, assigned, offered, pledged or otherwise transferred
unless (a) there is an effective registration statement under the Act
and applicable state securities laws covering any such transaction
involving such securities, (b) this corporation receives an opinion of
legal counsel for the holder of the securities reasonably satisfactory
to this corporation stating that such transaction is exempt from
registration, or (c) this corporation otherwise satisfies itself that
such transaction is exempt from registration.
(g) Exemption Reliance. Such Stockholder has been advised that the Parent
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Common Stock is being issued under this Agreement pursuant to exemptions from
applicable federal and state securities laws, and that Parent's reliance on such
exemptions is predicated in part on such Stockholder's representations contained
herein.
5. Indemnification and Contribution
5.1 Indemnification by Parent
To the extent permitted by law, Parent will indemnify and hold harmless
each Stockholder, any underwriter (as defined in the Securities Act) for such
Stockholder, its officers, directors, shareholders or partners and each person,
if any, who controls such Stockholder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (A) any untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference in
the Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (B) the
omission or alleged omission to state or incorporate by reference therein a
material fact required to be stated or incorporated by reference therein, or
necessary to make the statements included or incorporated by reference therein
not misleading, or (C) any violation or alleged violation by Parent of the
Securities Act, the Exchange Act, any
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state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and Parent will pay to each
such Stockholder (and its officers, directors, shareholders or partners),
underwriter or controlling person, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 5.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of Parent (which consent may not be
unreasonably withheld); nor shall Parent be liable in any such case for any such
loss, claim, damage, liability, or action to the extent that it arises out of or
is based upon (i) a Violation which occurs in reliance upon and in conformity
with written information furnished by any such Stockholder expressly for use in
the Registration Statement, or (ii) a Violation that would not have occurred if
such Stockholder had delivered to the purchaser the version of the Prospectus
most recently provided by Parent to the Stockholder as of a date prior to such
sale.
5.2 Indemnification by the Stockholders
To the extent permitted by law, each selling Stockholder, severally and not
jointly, will indemnify and hold harmless Parent, each of its directors, each of
its officers who has signed the Registration Statement, each person, if any, who
controls Parent within the meaning of the Securities Act, any underwriter, any
other Stockholder selling securities pursuant to the Registration Statement and
any controlling person of any such underwriter or other Stockholder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange Act
or other federal or state law, insofar as, and only to the extent that, such
losses, claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation (which includes without limitation the
failure of the Stockholder to comply with the prospectus delivery requirements
under the Securities Act, and the failure of the Stockholder to deliver the most
current prospectus provided by Parent prior to the date of such sale), in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Stockholder expressly for use in the Registration Statement or such Violation is
caused by the Stockholder's failure to deliver to the purchaser of the
Stockholder's Registrable Shares a prospectus (or amendment or supplement
thereto) that had been made available to the Stockholder by Parent prior to the
date of the sale; and each such Stockholder will pay any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 5.2 in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this Section 5.2 shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Stockholder, which consent shall not be unreasonably
withheld. The aggregate indemnification and contribution liability of each
Stockholder under this Section 5.2 shall not
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exceed the net proceeds received by such Stockholder in connection with sale of
shares pursuant to the Registration Statement.
5.3 Notice of Claims
Each person entitled to indemnification under this Section 5.3 (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 and
shall permit the Indemnifying Party to assume the defense of any such claim and
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party who conducts the defense of such claim or any litigation resulting
therefrom shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and 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 Section 5.3 unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation, shall (except with the consent of
each Indemnified Party) consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
5.4 Contribution
To the extent that the indemnification provided for in this Section 5.4 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue of alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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6. Notices
All notices and other communications hereunder shall be in writing and
delivered as set forth in Section 9.1 of the Merger Agreement, in the case of
Parent, to the address set forth therein and in the case of any Stockholder, to
the address set forth herein.
7. Amendments
This Agreement may not be amended except by an instrument signed by Parent
and the Stockholders holding a majority of the Registrable Securities.
8. Severability
In the event that any provision of this Agreement or the application
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
9. Transferability of Registration Rights
The rights under this Agreement are not transferable by holders of
Registrable Securities except (a) a transfer by will or intestacy, (b) estate
planning transfers consisting of gifts to the spouse or issue of the transferee
and transfers to trusts for the benefit of the spouse or issue of the
transferee, (c) a transfer to the constituent partners of a Stockholder that is
a partnership as part of a pro rata distribution of the shares of Parent Common
Stock held by such partnership so long as all such transferees appoint a single
representative as their attorney-in-fact for the purpose of receiving any
notices and exercising their rights under this Agreement, (d) a transfer by
Atrium Investors, LLC or Telecom Investors LLC to their respective members, or
(e) with the written consent of Parent.
10. Parties in Interest
This Agreement will be binding on and inure solely to the benefit of each
party hereto and its permitted assigns, and nothing in this Agreement, express
or implied, is intended to or will confer on any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
11. Specific Performance
The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms
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or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof (including the
indemnification provisions hereof) in any competent court having jurisdiction
over the parties, in addition to any other remedy to which they might be
entitled at law or in equity.
12. Governing Law; Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance with the
laws of the State of Washington, regardless of laws that might otherwise govern
under applicable principles of conflicts of law thereof. The parties hereto
irrevocably consent to the jurisdiction and venue of the state and federal
courts located in King County, Washington in connection with any action relating
to this Agreement.
13. Headings
The descriptive headings contained in this Agreement are included for
convenience of reference only and will not affect in any way the meaning or
interpretation of this Agreement.
14. Counterparts; Electronic Signatures
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart. To expedite the process of entering into this Agreement, the
parties acknowledge that Transmitted Copies of this Agreement will be equivalent
to original documents until such time as original documents are completely
executed and delivered. "Transmitted Copies" will mean copies that are
reproduced or transmitted via photocopy, facsimile or other process of complete
and accurate reproduction and transmission.
15. Business Day
Should the day on which any act required to be performed under this
Agreement fall on a Saturday, Sunday or legal holiday, the day required for such
performance shall be the next day that is not a Saturday, Sunday or legal
holiday.
IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.
AVT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Chairman and CEO
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Signature Page to Registration Rights Agreement
STOCKHOLDER
By:
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Name:
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Address:
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