Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement ("Agreement") is made and entered into
as of August 25th, 1999, by and between Telemonde, Inc., a Nevada corporation
(the "Company"), and Atlantic Crossing Ltd., a Bermuda company ("Atlantic
Crossing").
This Agreement is made pursuant to a Warrant to be entered into between
Atlantic Crossing and the Company (the "Warrant"), pursuant to which Atlantic
Crossing has the right to purchase one million one hundred thousand (1,100,000)
shares (as adjusted) of common stock of the Company, $.001 par value per share.
The Company has agreed to provide the registration and other rights set forth in
this Agreement for the shares of Common Stock of the Company issuable to
Atlantic Crossing under the Warrant.
The parties hereby agree as follows:
ARTICLE 1.
Section 1.01 Definitions. Capitalized terms used and not otherwise
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defined herein have the meanings set forth in the Agreement. The terms set
forth below are used herein as so defined:
"Business Day" means each day in which banking institutions in New York are
not required or authorized by law or executive order to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of common stock of the Company, $.001 par value
per share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means the record holder of any Registrable Security.
"IPO" shall mean the consummation of an underwritten public offering of
Common Stock pursuant to an effective registration statement filed under the
Securities Act (other than any registration statement relating to warrants,
options or shares of Common Stock granted or to be granted or sold primarily to
employees, directors, or officers of the Company, as a registration statement
filed pursuant to Rule 145 under the Securities Act or any successor rule or a
registration statement relating to employee benefit plans or interests therein)
and the listing of such Common Stock on a national securities exchange or the
quotation of prices therefor on NASDAQ (NMS) or on NASDAQ (SMALLCAP).
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other
governmental entity.
"Registrable Securities" means the shares of Common Stock receivable upon
issuance under the Warrant until such time as such securities cease to be
Registrable Securities pursuant to Section 1.03 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement.
Section 1.02 Stock Splits, Dividends, Recapitalizations, etc. Any shares
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or other securities resulting from any stock split, stock dividend,
reclassification of the Common Stock of the Company, merger, consolidation or
reorganization of the Company which may be received by the Holder shall also be
deemed to be Registrable Securities.
Section 1.03 Registrable Securities. Any Registrable Security will cease
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to be a Registrable Security when (i) a registration statement covering such
Registrable Security has been declared effective by the Commission and such
Registrable Security has been issued, sold or disposed of pursuant to such
effective registration statement or (ii) such Registrable Security becomes
eligible for disposable pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act or (iii) such Registrable Security is held by
the Company or any of its subsidiaries.
ARTICLE II
Section 2.01 Demand Registration. (a) Any time after the expiration of
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any lock-up agreements signed by the Company's directors or executive officers
in connection with the IPO or 180 days after the closing date of the IPO,
whichever occurs first, the Purchaser may request the Company to register under
the Securities Act all of the Registrable Securities held by the Purchaser for
sale in the manner specified in such notice.
(b) Promptly, and in any event within 10 days, following receipt of any
notice under this Section 2.01, the Company shall immediately notify the
Purchaser of the receipt of notice under this Section 2.01 and shall use its
best efforts to register under the Securities Act, for public sale in accordance
with the method of disposition specified in such notice from the Purchaser, the
Registrable Securities specified in the Purchaser's notice (and in any notices
received from other Holders no later than the 10th Business Day after receipt of
the notice sent by the Company) (such other Holders and the Purchaser are
hereinafter referred to as the "Requesting Holders"). If such method of
disposition shall be an underwritten public offering, the Company may designate
the managing underwriter of such offering. Except as specified in the following
sentence, the Company
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shall be obligated to register Registrable Securities pursuant to this Section
2.01 on one occasion only. A request pursuant to this Section 2.01 shall be
counted only when (i) all the Registrable Securities requested to be included in
any such registration have been so included, (ii) the corresponding registration
statement has become effective under the Securities Act, and (iii) the public
offering has been consummated and the Registrable Securities have been sold on
the terms and conditions specified therein. Notwithstanding anything to the
contrary contained herein, the Company may delay the filing or effectiveness of
a registration statement for up to 45 days after receipt of a request hereunder
if (i) at the time of such request the Company is engaged in a firm commitment
underwritten public offering of shares of its Common Stock and Holders are
permitted to include all of the Registrable Securities or (ii) the Board of
Directors of the Company determines in its reasonable judgment and in good faith
that the filing of such a registration statement or the making of any required
disclosure in connection therewith would have a material adverse effect on the
Company or substantially interfere with a significant transaction in which the
Company is then engaged. The Company will promptly give the Holders written
notice of such determination and an approximation of the period of the
anticipated delay. The Company shall provide written notice to the Holders of
the end of each delay period. The Company shall not be entitled to initiate a
delay period unless it shall concurrently prohibit sales by such other security
holders under registration statements covering securities held by such other
security holders and have in place a policy that prohibits sales of securities
of the Company by senior executive officers during such period.
(c) The Company shall be entitled to include in any registration statement
filed pursuant to this Section 2.01, for sale in accordance with the method of
disposition specified by the Requesting Holders, securities of the Company
entitled generally to vote in the election of directors (or any securities
convertible into or exchangeable for or exercisable for the purchase of
securities so entitled generally to vote in the election of directors). If,
however, such registration is an underwritten registration and the managing
underwriters participating in such offering conclude that the total amount of
Common Stock requested by the Holders and the Company desiring to participate in
such registration to be included in such registration exceeds the amount which
can be sold in (or during the time of) such offering without delaying or
jeopardizing the success of the offering (including the price per share of the
securities to be sold) then the amount of Common Stock to be offered for the
account of the Company shall be reduced to zero, if necessary.
Section 2.02 Piggy-Back Registration. If the Company proposes to
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register any securities under the Securities Act for sale to the public (other
than in an IPO), whether for its own account or for the account of other
security holders or both (except with respect to registration statements on
Forms S-4 or S-8 for purposes permissible under such forms as of the date
hereof, or any successor forms for comparable purposes that may be adopted by
the Commission), each such time it will give written notice to all Holders of
its intention to do so (but in any event no less than 15 Business Days before
the anticipated filing date). Upon the written request of any such Holder,
received by the Company no later than the 10th Business Day after receipt by
such Holder of the notice sent by the Company, to register, on the same terms
and conditions as the shares of securities otherwise being sold pursuant to such
registration, any of its Registrable Securities (which request shall state the
intended method of disposition thereof), the Company will use its best efforts
to cause the
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Registrable Securities as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by the Company on the same terms and conditions as any
similar securities included therein, all to the extent requisite to permit the
sale or other disposition by each Holder (in accordance with its written
request) of such Registrable Securities so registered; provided, however, that
the Company may at any time prior to the effectiveness of any such registration
statement, in its sole discretion and without the consent of any Holder, abandon
the proposed offering in its entirety. The number of Registrable Securities to
be included in such a registration may be reduced or eliminated if and to the
extent the managing underwriter shall render to the Company its opinion that
such inclusion would jeopardize the successful marketing of the securities
(including the Registrable Securities) proposed to be sold therein. Within 10
Business Days after receipt by each Person proposing to sell Registrable
Securities pursuant to the registered offering of the opinion of such managing
underwriter, all such Selling Holders may allocate among themselves the number
of shares of such Registrable Securities which such opinion states may be
distributed without adversely affecting the distribution of the securities
covered by the registration statement (or if such Selling Holders are unable to
agree among themselves with respect to such allocation, such allocation shall be
in proportion to the respective numbers of shares specified in their respective
written requests). Notwithstanding anything to the contrary contained in this
Section 2.02, in the event that there is a firm underwriting commitment offer of
securities of the Company pursuant to a registration statement covering
Registrable Securities and a Holder or any other Person does not elect to sell
its Registrable Securities to the underwriters of the Company's securities in
connection with such offering, such Holder or any other Person shall not offer
for sale, sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock, or any securities
convertible into or exchangeable into or exercisable for any shares of Common
Stock during the period of distribution of the Company's securities by such
underwriters, which shall be specified in writing by the underwriters and shall
not exceed 60 days following the date of effectiveness under the Securities Act
of the registration statement relating thereto.
Section 2.03 Shelf Registration. If the Company files a "Shelf"
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registration, for an offer to be made on a continuous basis pursuant to Rule 415
of the Securities Act (other than an IPO), whether or not for sale for its own
account, it shall give prompt written notice to all Holders of its intention to
do so and Holders shall have the right to be included in such Self Registration
on the same terms and conditions as are applicable to Piggy-Back Registrations
under Section 2.02.
Section 2.04 Registration Procedures. If and whenever the Company,
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pursuant to Section 2.01, becomes obligated to effect the registration of any of
the Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file as promptly as possible with the Commission a
registration statement in accordance with this Article II with respect to
such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (as determined below);
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified below and as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement in
accordance with the sellers' intended method of disposition set forth in
such registration statement for such period;
(c) furnish to each Selling Holder and to each underwriter such number
of copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein prior to the filing with the Commission) as such Persons
may reasonably request in order to review such documentation and to
facilitate the public sale or other disposition of the Registrable
Securities covered by such registration statement;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as the Selling Holders or, in the case
of an underwritten public offering, the managing underwriter, shall
reasonably request;
(e) immediately notify each Selling Holder and each underwriter, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus contained 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 not misleading in light of the circumstances then
existing;
(f) furnish at the request of a Selling Holder, (i) on the date that
Registrable Securities are delivered to the underwriters for sale pursuant
to such registration statement (or on the effective date in the case of an
offering that is not underwritten), an opinion of counsel for the Company
dated as of such date and addressed to the underwriters, if any, and to the
Selling Holders, stating that such registration statement has become
effective under the Securities Act and that (A) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, (B) the registration
statement, the related prospectus, and each amendment or supplement
thereof, comply as to form in all material respects with the requirements
of the Securities Act and the applicable rules and regulations thereunder
of the Commission (except that such counsel need express no opinion as to
the financial statements or any engineering report contained or
incorporated therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters or by any such Selling Holder or
its counsel, and (ii) on the effective date of the registration statement
and on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration statement, a letter
dated
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such dates from the independent accountants retained by the Company,
addressed to the underwriters, if any, and to the Selling Holders, stating
that they are independent public accounts within the meaning of the
Securities Act and that, in the opinion of such accountings, the financial
statements of the Company and the schedules thereto that are included or
incorporated by reference in the registration statement or the prospectus,
or any amendment or supplement thereof, comply as to form in all material
respects with the applicable requirements of the Securities Act and the
published rules and regulations promulgated thereunder, and such letter
shall additionally address such other financial matters (including
information as to the period ending no more than five business days prior
to the date of such letter) included in the registration statement in
respect to which such letter is being given as the underwriters or any
Selling Holder may reasonably request;
(g) use its best efforts to keep effective and maintain a
registration, qualification, approval or listing obtained to cover the
Registrable Securities as may be necessary for the Selling Holders to
dispose thereof and shall from time to time amend or supplement any
prospectus used in connection therewith to the extent necessary in order to
comply with applicable law;
(h) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the Selling Holders to consummate the disposition of
such Registrable Securities; and
(i) enter into customary agreements (including, if requested, an
underwriting agreement in the customary form) and take such other actions
as are reasonably requested by the Selling Holders or the underwriters, if
any, in order to expedite or facilitate the disposition of such Registrable
Securities.
The period of distribution of Registrable Securities in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the period
of distribution of Registrable Securities in any other registration shall be
deemed to extend until the earlier of the sale of all Registrable Securities
covered thereby or the fulfillment of the Company's obligations under subsection
(g) of this Section 2.04;
In connection with each registration hereunder, each Selling Holder will
furnish promptly to the Company in writing such information with respect to
itself and the proposed distribution by it as shall be reasonably necessary in
order to ensure compliance with federal and applicable state securities laws.
In connection with each registration hereunder with respect to an
underwritten public offering, each Selling Holder agrees to enter into a written
agreement with the managing underwriter or underwriters selected in the manner
herein provided in such form and containing such provisions
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as are customary in the securities business for such an arrangement between
underwriters and companies of the Company's size and investment stature,
provided that such agreement shall not contain any such provision applicable to
the Selling Holders that is inconsistent with the provisions hereof; and further
provided, that the time and place of the closing under said agreement shall be
as mutually agreed upon among the Company, the Selling Holders and such managing
underwriter.
Section 2.05 Expenses. (a) All expenses incident to the Company's
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performance or compliance with this Agreement, including without limitation, all
registration and filing fees, blue sky fees and expenses, printing expenses,
listing fees, fees and disbursements of counsel and independent public
accountants for the Company, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, and costs
of insurance and reasonable out-of-pocket expenses of the Selling Holders, but
excluding any Selling Expenses (as defined below), are herein called
"Registration Expenses." All underwriting discounts and selling commissions
attributable to the sale of the Registrable Securities are herein called
"Selling Expenses."
(b) The Company will pay all Registration Expenses with each
registration statement filed pursuant to this Agreement, whether or not the
registration becomes effective, and the Selling Holders shall pay Selling
Expenses in connection with any Registrable Securities registered and sold
pursuant to this Agreement.
Section 2.06 Indemnification. (a) In the event of a registration of any
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Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless each Selling Holder thereunder and each
underwriter of Registrable Securities thereunder and each Person, if any, who
controls such Selling Holder or underwriter within the meaning of the Securities
Act and the Exchange Act, against any losses, claims, damages or liabilities
(including reasonable attorneys' fees) ("Losses"), joint or several, to which
such Selling Holder or underwriter or controlling Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Losses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the 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 each such Selling Holder,
each such underwriter and each such controlling Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Loss or actions; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Selling Holder, such underwriter or such
controlling Person in writing specifically for use in such registration
statement or prospectus.
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(b) Each Selling Holder agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and each Person, if any,
who controls the Company within the meaning of the Securities Act or of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Selling Holder, but only with respect to information with respect to such
Selling Holder furnished in writing by or on behalf of such Selling Holder
expressly for inclusion in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 2.06. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 2.06 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that, (i) if the indemnifying party has failed to assume the defense
and employ counsel or (ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified
party shall have concluded that there may be reasonable defenses available to
the indemnified party that are different from or additional to those available
to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
(d) If the indemnification provided for in this Section 2.06 is not
available to the Company or the Selling Holders or is insufficient to hold them
harmless in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each such indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
expenses as between the Company on the one hand and each Selling Holder on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and of each Selling Holder on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and each Selling Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statements of a material fact or the omission or
alleged omission to state a material fact has ben made by, or relates to,
information supplied by such party,
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and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. 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 is not
guilty of such fraudulent misrepresentation.
ARTICLE III
MISCELLANEOUS
Section 3.01 Communications. All notices and other communications
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provided for or permitted hereunder shall be made in writing by registered or
certified first-class mail, return receipt requested, telex, telegram, telecopy,
courier service or personal delivery:
(i) if to a Holder of Registrable Securities, at the most current
address given by such Holder of the Company in accordance with the
provisions of this Section 3.01, which address initially is, with
respect to Atlantic Crossing, the address set forth in the Warrant,
and
(ii) if to the Company, initially at its address set forth in the
Share Agreement and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 3.01.
All such notices and communications shall be deemed to have been duly given
at the time delivered by hand, if personally delivered; four days after mailed
by certified mail, return receipt requested, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next Business Day
if timely delivered to an air courier guaranteeing overnight delivery.
Section 3.02 Successor and Assigns. This Agreement shall inure to the
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benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities.
Section 3.03 Counterparts. This Agreement may be executed in any number
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of counterparts and by different parties hereto in separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
Section 3.04 Headings. The headings in this Agreement are for
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convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.05 Governing Law. The laws of the State of New York shall
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govern this Agreement without regard to principles of conflict of laws.
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Section 3.06 Severability of Provisions. Any provision of this Agreement
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which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
Section 3.07 Attorneys' Fees. In any action or proceeding brought to
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enforce any provision of this Agreement, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to its costs and expenses and
any other available remedy.
Section 3.08 Amendment. This Agreement may be amended only by means of a
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written amendment signed by the Company and by the Holders of a majority of the
Registrable Securities.
Section 3.09 Registrable Securities Held by the Company or Its
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Affiliates. In determining whether the Holders of the required amount of
Registrable Securities have concurred in any direction, amendment, supplement,
waiver or consent, Registrable Securities owned by the Company or its affiliates
(as such term is defined in the rules promulgated under the Securities Act)
shall be disregarded.
Section 3.10 Assignment. The rights of the Holder under this Agreement
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shall not be assigned to any party. Any assignment or attempted assignment
shall be void.
Section 3.11 Facsimiles. This Agreement may be executed by a facsimile
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signature, which shall have the same force and effect as a manually executed
signature
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TELEMONDE, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
ATLANTIC CROSSING, LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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