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EXHIBIT 10.3
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
by and among
PARADIGM4, INC.
CRESTWOOD CAPITAL INTERNATIONAL, LTD.,
CRESTWOOD CAPITAL PARTNERS L.P.,
P.V. II, L.P.,
▇▇▇▇▇ ▇▇▇▇▇ VENTURES III, L.P.,
▇▇▇▇▇▇ ▇▇▇▇ L.L.C.,
APPLIED TELECOMMUNICATIONS TECHNOLOGIES, INC.,
A.T.T. IV, N.V.
and certain additional Persons referred to herein
Dated as of May 9, 1997
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TABLE OF CONTENTS
Page
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1. Certain Definitions .................................................... 1
2. Registration Rights .................................................... 2
2.1. Demand Registrations .............................................. 2
2.2. Piggyback Registrations ........................................... 5
2.3. Allocation of Securities Included in Registration Statement ....... 6
2.4. Registration Procedures ........................................... 7
2.5. Registration Expenses ............................................. 12
2.6. Certain Limitations on Registration Rights ........................ 12
2.7. Limitations on Sale or Distribution of Other Securities ........... 12
2.8. Indemnification ................................................... 13
3. Underwritten Offerings ................................................. 16
3.1. Requested Underwritten Offerings .................................. 16
3.2. Piggyback Underwritten Offerings .................................. 16
4. General ................................................................ 17
4.1. Rule l44 .......................................................... 17
4.2. Preparation: Reasonable Investigation ............................. 17
4.3. Nominees for Beneficial Owners .................................... 17
4.4. Notices and Other Communications .................................. 17
4.5. Amendments ........................................................ 19
4.6. Miscellaneous ..................................................... 20
4.7. No Inconsistent Agreements ........................................ 21
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EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT, dated as of May 9, 1997, by and among
PARADIGM4 INC., Delaware corporation (the "Company") on the one hand, and the
several holders of securities of the Company executing this Agreement and
identified on Schedule I hereto, as amended from time to time (sometimes
referred to herein individually as a, "Holder" and collectively as the
"Holders"), on the other.
W I T N E S S E T H:
WHEREAS, the Holders are the holders of Company Securities (as such
term and other capitalized terms not otherwise defined herein are defined in
Section 1), including those listed on Schedule I hereto; and
WHEREAS, the Holders and the Company wish to provide for the Holders
to have certain rights to have their shares of Common Stock registered under the
Securities Act, on and subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the panics hereto
hereby agree as follows;
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
meanings ascribed to them below;
"Commission"; the Securities and Exchange Commission or any
successor agency.
"Company Securities"; Common Stock, par value $.001 per share, of
the Company ("Common Stock"), together with any convertible securities, options
or warrants pursuant to which Common Stock is issuable, directly or indirectly.
"Holder" or "Holders"; Each Holder identified on Schedule I hereto,
any holder of Company Securities who or which hereafter becomes a party to this
Agreement, and any Person who shall hereafter acquire Registrable Securities
from any Holder and to whom such Holder assigns his or it; rights under this
Agreement.
"IPO"; initial public offering pursuant to which equity securities
of the Company become registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
"Management Shareholders"; ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇.
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"Person": any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
other entity, whether acting in an individual, fiduciary, or other capacity.
"Registrable Securities": Shares of Common Stock currently held or
hereafter acquired by any Holder, or issuable pursuant to any Company Securities
currently held or hereafter acquired by any Holder, or otherwise issued with
respect to any securities referred to in this definition, whether by way of
stock dividend or stock split, in connection with a combination or
reorganization or otherwise, and including without limitation the Company
Securities listed on Schedule I hereto; provided, that (i) in the case of the
Management Shareholders, only Common Stock issuable pursuant to the Company
Securities identified on Schedule identified on Schedule I hereto shall be
deemed Registrable Securities, and (ii) any shares of Common Stock constituting
Registrable Securities shall cease to be such if and when they (A) are
distributed to the public pursuant to a registration statement under the
Securities Act or Rule 144 thereunder, (B) become subject to resale pursuant to
Rule 144(k) under the Securities Act (or any successor provision) or (C) shall
have otherwise been transferred and the new certificate evidencing ownership
thereof does riot bear a restrictive legend pursuant to the Securities Act and
is not subject to a stop transfer order delivered by or on behalf of the
Company.
For all purposes of this Agreement, a "majority in interest" or
other percentage of the Registrable Securities shall be determined as if all
outstanding Company Securities were converted into Common Stock, and such
percentage shall be based upon the number of shares of Common Stock that would
be deemed to be Registrable Securities pursuant to the preceding sentence at the
time the calculation is made.
"Securities Act"; the Securities Act of 1933, as amended.
"Shareholders' Agreement" that certain Shareholders' Agreement of
even date herewith between the Company, the Holders and certain other parties
thereto.
2. Registration Rights.
2.1. Demand Registrations.
(a) (i) Subject to Sections 2.1(b) and 2.3 below, at any time and
from time to time alter the earlier of (x) the first anniversary of the
consummation of an IPO, (y) the earliest date that any other Person, by
agreement with the Company, is entitled to demand registration, and (z) such
date that is 36 months after the date hereof, Holders holding Registrable
Securities with an aggregate value of at least that set forth in Section
2.l(b)(v) shall have the right to require the Company to file a registration
statement under the Securities Act covering all or any part of their respective
Registrable Securities, by delivering a written request (a "Demand Request")
therefor to the Company specifying the number and class and series of
Registrable Securities to be included in such registration by such Holder and
the intended method of distribution thereof. If the Company is then eligible to
effect a registration on Form S-3 (or any
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successor form), such Holder may, in such Demand Request, or the Company may, in
response thereto, designate such registration as an "S-3 Registration". All such
requests by any Holder pursuant to this Section 2.1 (a)(i) are referred to
herein as "Demand Registration Requests," and the registrations so requested are
referred to herein as "Demand Registrations" (with respect to any Demand
Registration, the Holder or Holders making such demand for registration being
referred to as the "Initiating Holder"). As promptly as practicable, but no
later than 15 days after receipt of a Demand Registration Request, the Company
shall give written notice (the "Demand Exercise Notice") of such Demand
Registration Request to all Holders of record of Registrable Securities. Any
Demand Registration which is not an S-3 Registration is sometimes referred to
herein as a "Standard Registration".
(ii) The Company, subject to Sections 2.3 and 2.6, shall include in
each Demand Registration (x) the Registrable Securities of the Initiating Holder
and (y) the Registrable Securities of any other Holder which shall have made a
written request to the Company for inclusion thereof in such registration (which
request shall specify the maximum number and class and series of Registrable
Securities intended to be disposed of by such Holder(s)) within 20 days after
the receipt of the Demand exercise Notice.
(iii) The Company shall, as expeditiously as possible following a
Demand Registration Request, use its best efforts to (x) effect such
registration under the Securities Act (including, without limitation, by means
of a shelf registration pursuant to Rule 415 under the Securities Act if so
requested and if the Company is then eligible to use such a registration) of the
Registrable Securities which the Company has been so requested to register, for
distribution in accordance with such intended method of distribution, and (y) if
requested by the Initiating Holder, obtain acceleration of the effective data of
the registration statement relating to such registration.
(b) The Demand Registration rights granted to the Holders in Section
2.1(a) are subject to the following limitations; (i) the Company shall not be
required to cause to become effective pursuant to Section 2.1(a) more than two
Standard Registrations in the aggregate, provided that a member of either the
ATTI Group or the ▇▇▇▇▇ ▇▇▇▇▇ Group (as such terms are defined in the
Shareholders' Agreement) must be an Initiating Holder of any Standard
Registration, and if either of such Holders is not an Initiating Holder of the
first Standard Registration, no second Standard Registration shall occur unless
such a Holder is an Initiating Holder thereof; (ii) the Company shall not be
required to cause more than one Standard Registration pursuant to Section 2.1(a)
to be declared effective within any 12-month period; (iii) the Company shall not
be required to cause to become effective a registration pursuant to this Section
2.1 unless the Initiating Holder in connection therewith has a bona fide intent
to sell Registrable Securities pursuant to such registration; (iv) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company and prepared in good faith stating that in the good faith judgment
of the Board of Directors of the Company it would be seriously detrimental to
the Company and its stockholders for such registration to be effected at such
time (a "Valid Business Reason"), the Company may postpone filing a registration
statement relating to a. Demand Registration Request once in a given 12 month
period until such Valid Business Reason no longer exists, but in no event for
more than 180 days, and, in case a registration
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statement has been filed relating to a Demand Registration Request the Company
may cause such registration statement to be withdrawn; provided, however, that
once any registration becomes effective the Company may not cause its
effectiveness to be terminated and the Company may not postpone amending or
supplementing such registration statement; provided, further, that if the
Company determines to postpone filing or withdraw a registration statement
pursuant to this clause (iv) the Company shall give written notice of its
determination to postpone or withdraw such registration statement and, when
applicable, of the fact that the Valid Business Reason for such postponement or
withdrawal no longer exists, in each case, promptly after the occurrence
thereof; and (v) each Demand Registration must include equity securities with a
proposed offering price of $500,000, in the aggregate. If the Company shall give
any notice of postponement or withdrawal of any registration statement, the
Company shill not, during the period of postponement or withdrawal, register any
Common Stock, other than pursuant to a registration statement on Form S-4 or S-8
(or an equivalent registration form then in effect). If the Company shall
postpone filing or shall withdraw any registration statement filed under Section
2.1(a) (whether pursuant to clause (iv) above or as a result of any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court), the Company shall not be considered to have
enacted an effective registration for the purposes of this Section 2.1 until the
Company shall have filed a new registration statement covering the Registrable
Securities covered by the withdrawn registration statement and such registration
statement shall have been declared effective and shall not have been withdrawn.
If the Company shall give any notice of withdrawal or postponement of filing of
a registration statement, the Company shall, at such time as the Valid Business
Reason that caused such withdrawal or postponement no longer exists (but in no
event later than 180 days after the date of the postponement), use its best
efforts to effect the registration under the Securities Act of the Registrable
Securities covered by such withdrawn or postponed registration statement in
accordance with Section 2.1 (unless the Holder delivering the Demand
Registration Request shall have withdrawn such request in which case the Company
shall not be considered to have effected an effective registration for the
purposes of this Section 2.1).
(c) The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement pursuant to Section 2.1(a) authorized but
unissued shares of Common Stock or shares of Common Stock held by the Company as
treasury shares, if shares of Common Stock are being registered by any Holder
pursuant to such registration statement, provided that such inclusion shall be
permitted only to the extent that it is pursuant to and subject to the terms of
the underwriting agreement or arrangement, if any, entered into by the Holders
of Registrable Securities pursuant to the Demand Registration to which such
registration statement relates.
(d) The managing underwriter and each other underwriter for any
Demand Registration shall be selected by the Company; provided that such
managing underwriter shall be reasonably acceptable to the Initiating Holder
making the demand for such registration (it being agreed that any nationally
recognized investment bank shall be deemed to be reasonably acceptable to such
Initiating Holder).
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(e) Registrations pursuant to this Section 2.1 shall be on Form S-3
(or any successor form), if permitted, or on Form S-1 (or any successor form),
as shall be selected by the Company.
2.2. Piggyback Registrations.
(a) If, at any time, the Company proposes or is required to register
any of its equity securities under the Securities Act (other than pursuant to
(i) registrations solely of securities in connection with an employee benefit
plan or dividend reinvestment plan or a merger, consolidation or reorganization
subject to Form S-4, or (ii) a Demand Registration under Section 2.1) pursuant
to a registration statement on Form SB-1, Form SB-2, Form S-1, Form S-2 or Form
S-3 (or an equivalent general registration form then in effect), whether or not
for its own account, the Company shall give prompt written notice of its
intention to do so to each of the Holders of record of Registrable Securities.
Upon the written request of any Holder, made within 15 days following the
receipt of any such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof) the Company shall, subject to
Sections 2.2(b), 2.3 and 2.6 hereof, use its best efforts to cause all such
Registrable Securities, the Holders of which have so requested the registration
thereof to be registered under the Securities Act (together with the securities
which the Company at the time proposes to register), to permit the sale or other
disposition by the Holders (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. No
registration effected under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations upon request under Section 2.1.
(b) If, at any time after giving written notice of its intention to
register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
equity securities, the Company may, at its election, give written notice of such
determination to all Holders of record of Registrable Securities and (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, without prejudice, however, to the rights of Holders under Section
2.1, and (ii) in case of a determination to delay such registration of its
equity securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other equity securities.
(c) Any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 2.2 by giving written notice to the Company of its request to
withdraw, provided, however, that (i) such request must be made in writing prior
to the earlier of the execution of the underwriting agreement or the execution
of the custody agreement with respect to such registration and (ii) such
withdrawal shall be irrevocable and, after making such withdrawal, a Holder
shall no longer have any right to include Registrable Securities in the
registration as to which such withdrawal was made.
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2.3. Allocation of Securities Included in Registration Statement.
(a) If any Demand Registration involves an underwritten offering and
the managing underwriter shall advise the Company that, in its view, the number
of securities requested to be included in such registration (including those
securities requested by the Company to be included in such registration) exceeds
the largest number (the "Section 2.1 Sale Number") that can be sold in an
orderly manner in such offering within a price range acceptable to the Holders
of Registrable Securities proposed to be registered, the Company shall include
in such registration;
(i) If such registration is an IPO, (I) all shares of Common Stock
that the Company proposes to register for its own account; and (II) to the
extent that the number of shares of Common Stock proposed to be registered by
the Company is less than the Section 2.1 Sale Number, the remaining equity
securities to be included in such registration (the "Remaining IPO Securities")
shall be allocated on a pro rata basis among all Holders requesting that
Registrable Securities be included in such registration and all Persons
requesting that Piggyback Registration Securities (as defined below) be included
in such registration, based on the number of Registrable Securities or other
equity securities of the Company subject to piggyback registration rights (such
securities, "Piggyback Registration Securities"), as the case may be, owned by
each Holder requesting inclusion of Registrable Securities in such registration
and each Person requesting inclusion of Piggyback Registration Securities in
such registration;
(ii) if such registration is not an IPO, all Registrable Securities
requested to be included in such registration by Holders of Registrable
Securities, and all Piggyback Registration Securities requested to be included
in such registration; provided, however, that if the aggregate number of such
Registrable Securities and such Piggyback Registration Securities exceeds the
Section 2.1 Sale Number, the number of such securities (not to exceed the
Section 2.1 Sale Number) to be included in such registration shall be allowed on
a pro rata basis among all Holders requesting that Registrable Securities be
included in such registrations and all Persons requesting that Piggyback
Registration Securities be included in such registration, based on the number of
Registrable Securities or Piggyback Registration Securities, as the case may be,
then owned by each Holder or other Person requesting inclusion in such
registration in relation to the number of Registrable Securities and Piggyback
Registration Securities owned by all Holders and all other Persons requesting
inclusion of Registrable Securities and Piggyback Registration Securities as the
case may be, in such registration.
If as a result of the proration provisions of this Section 2.3(a),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested to be included, such Holder may
elect to withdraw his request to include Registrable Securities in such
registration or may reduce the number requested to be included; provided,
however, that (x) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (y) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder shall no longer have any
right to include Registrable Securities in the registration as to which such
withdrawal was made.
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(b) If any registration pursuant to Section 2.2 (a "Piggyback
Registration") involves an underwritten offering and the managing underwriter
shall advise the Company that, in its view, the number of Securities requested
to be included in such registration exceeds the number (the "Section 2.2 Sale
Number") that can be sold in an orderly manner in such registration within a
price range acceptable to the Company, the Company shall include in such
registration;
(i) all equity securities that the Company proposes to register for
its own account (the "Company Securities"), and
(ii) to the extent that the number of Company Securities is less
than the Section 2.2 Sale Number, the remaining equity securities to be included
in such registration shall, subject to the following sentence, be allocated
among all Holders, all Persons Holding Piggyback Registration Securities and the
holders of any shares of Common Stock held by employees of the Company (other
than plan or option shares eligible for registration on Form S-8 or a similar or
successor form) and proposed by the Company to be registered ("Management
Shares") on a pro rata basis, based upon the number of Registrable Securities,
Piggyback Registration Securities or Management Shares of the Company, as the
case may be, owned by each Holder and each Person requesting inclusion of
Piggyback Registration Securities or Management Shares in such Piggyback
Registration. Notwithstanding the foregoing, however, the managing underwriter
shall be authorized to determine whether it would be preferable to include a
lesser number of Management Shares (or no Management Shares) in such
registration, and in the event of such a determination only such lesser number
of Management Shares (or no Management Shares) shall be so included, to be
allocated among the holders of Management Shares so included (if any), on the
other, on a pro rata basis as set forth above. In such event, the number of
Piggyback Registration Securities to be included in such registration pursuant
to such determination shall be allocated among the Holders and other Persons
requesting inclusion thereof of on a pro rata basis as set forth above.
2.4. Registration Procedure. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
on an appropriate registration form of the Commission for the disposition of
such Registrable Securities in accordance with the intended method of deposition
thereof, which form (i) shall be selected by the Company and (ii) shall, in the
case of a shelf registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and such registration statement shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the Commission
to be filed therewith, and the Company shall use its best efforts to cause such
registration statement to become and remain effective (provided, however, that
before filing a registration statement or prospectus or any amendments or
supplements thereto, or comparable statements under securities or blue sky laws
of any jurisdiction, the Company will furnish to the counsel of any Holder
participating in the
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planned offering and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents will be
subject to the reasonable review and reasonable comment of such counsel, and the
Company shall not file any registration statement or amendment thereto or any
prospectus or supplement thereto to which the holders of a majority of the
Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably object in writing);
(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
such period (which shall not be required to exceed 150 days in the case of a
registration pursuant to Section 2.1 or 120 days in the case of a registration
pursuant to Section 2.2) as any seller of Registrable Securities pursuant to
such registration statement shall request and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such registration statement in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in such registration statement;
(c) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each ease including all exhibits), and
the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such seller and underwriter may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller (the Company hereby consenting to the use in
accordance with all applicable law of each such registration statement (or
amendment or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto) by each such seller of Registrable
Securities and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such registration statement or
prospectus);
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other applicable
securities or "blue sky" laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that in no event shall the Company be required to qualify to do business
as a foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to subject
itself to taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
(e) promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any;
(i) when the registration statement, any pre-effective amendment, the prospectus
or any prospectus supplement related thereto or post-effective amendment to the
registration statement has been flied and, with respect
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to the registration statement or any post-effective amendment) when the same has
become effective; (ii) of any request by the Commission or state securities
authority for amendments or supplements to the registration statement or the
prospectus related thereto or for additional information; (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction or the initiation of any
proceeding for such purpose; (v) of the existence of any fact of which the
Company becomes aware which results in the registration statement, the
prospectus related thereto or any document incorporated therein by reference
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations and
warranties contemplated by Section 3 below cease to be true and correct in all
material respects; and, if the notification relates to an event described in
clause (v), the Company shall promptly prepare and furnish to each such seller
and each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not 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 statements therein in the light of the
circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement
(and in any event within 16 months thereafter), an earnings statement (which
need not be audited) covering the period of at least twelve consecutive months
beginning with the first day of the Company's first calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 1.1 (a) of the Securities Act and Rule 158
thereunder;
(g) (i) cause all such Registrable Securities covered by such
registration statement to be listed on the principal securities exchange on
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed, cause all such
Registrable Securities to be, at the Company's option, listed on a national
securities exchange or, as a NASDAQ security within the meaning of Rule 11Aa2-1
promulgated by the Commission pursuant to the Exchange Act or, failing that,
secure NASDAQ authorization for such shares and without limiting the generality
of the foregoing, take all actions that may be required by the Company as the
issuer of such Registrable Securities in order to facilitate the managing
underwriter's arranging for the registration of at least two market makers as
such with respect to such shares with the National Association of Securities
Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
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(i) enter into such customary agreements (including, if applicable,
an underwriting agreement) and take such other actions as the Holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities, provided that the underwriting agreement if any, shall
be reasonably satisfactory in form and substance to the Company. The Holders of
the Registrable Securities which are to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that the Company make to and for the benefit of such Holders the
representations, warranties and covenants of the Company which are being made to
and for the benefit of such underwriters and which are of the type customarily
provided to institutional investors in secondary offerings;
(j) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering such matters as are customarily covered by such opinions and
"cold comfort" letters delivered to underwriters in underwritten public
offerings, which opinion and letter shall be reasonably satisfactory to be
underwriter if any, and to Holders and furnish to each Holder participating in
the offering and to each underwriter, if any, a copy of such opinion and letter
addressed to such Holder or underwriter;
(k) deliver promptly to each Holder participating in the offering
and each underwriter, if any, copies of all correspondence between the
Commission and the Company, its counsel or auditors or with the Commission or
its staff with respect to the registration statement, other than those portions
of any such correspondence and memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of such
confidentiality agreements as the Company may, reasonably request, make
reasonably available for inspection by any seller of such Registrable Securities
covered by such registration statement, by any underwriter, if any,
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such under after all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(l) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the registration statement;
(n) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;
(o) promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
after the initial filing of such
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registration statement, provide copies of such document to counsel to the
selling holders of Registrable Securities and to the managing underwriter, if
any, and make the Company's representatives reasonably available for discussion
of such document and make such changes in such document prior to the filing
thereof as counsel for such selling holders or underwriters may reasonably
request;
(p) furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(q) cooperate with the selling Holders of Registrable Securities and
the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement prior to any Sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling Holders of Registrable Securities, at least three
business days prior to any sale of Registrable Securities; and
(r) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request provided that such information shall be
used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of
any notice from the Company of the happening of any event of the kind described
in clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue
such Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(e) of this Section 2.4 and if so directed by the Company will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of rite prospectus covering such Registrable
Securities that was in effect at the time of receipt of such notice. In the
event the Company shall give any such notice, the applicable period set forth in
paragraph (b) of this Section 2.4 shall be extended by the number of days during
such period from and including the date of the giving of such notice to and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by paragraph (e) of this Section 2.4.
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2.5. Registration Expenses. The Company shall, whether or not any
registration pursuant to this Agreement becomes effective, pay all expenses
incident to the Company's performance of or compliance with this Article 2,
including (i) Commission, stock exchange or NASD registration and filing fees
and all listing fees and fees with respect to the inclusion of securities in
NASDAQ (ii) fees and expenses of compliance with state securities or "blue sky"
laws and in connection with the preparation of a "blue sky" survey, including
without limitation, reasonable fees and expenses of blue sky counsel, (iii)
printing expenses, (iv) messenger and delivery expenses, (v) internal expenses
(including, without limitation, all salaries and expenses of the Company's
officers and employees performing legal and accounting duties), (vi) expenses
incurred in connection with any road show, (vii) fees and disbursements of
counsel for the Company, (viii) with respect to each registration, the fees and
disbursements of one counsel for the selling Holders selected by Holders of a
majority of the Registrable Securities included in such registration as well as
of one local counsel (as applicable), (ix) fees and disbursements of all
independent public accountants (including the expenses of any audit and/or "cold
comfort" letter) and fees and expenses of other persons, including special
experts, retained by the Company and (x) any other fees and disbursements of
underwriters, if any, customarily paid by issuers or sellers of securities.
Notwithstanding the foregoing, (A) the provisions of this Section 2.5 shall be
deemed amended to the extent necessary to cause these expense provisions to
comply with "blue sky" laws of each state in which the offering is made and (B)
in connection with any registration hereunder, each Holder of Registrable
Securities being registered shall pay all underwriting discounts and commissions
and transfer taxes, if any, attributable to such Registrable Securities.
2.6. Certain Limitations on Registration Rights. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or in the
case of a registration under Section 2.2, if the Company has determined to enter
into an underwriting agreement in connection therewith, all Registrable
Securities to be included in such registration shall be subject to an
underwriting agreement and no Person may participate in such registration unless
such Person agrees to sell such Person's securities on the basis provided
therein and completes and/or executes all questionnaires and other documents
(other than powers of attorney) which must be executed in connection therewith.
2.7. Limitations on Sale or Distribution of Other Securities. To the
extent requested in writing by a managing underwriter of any registration
pursuant to which Holders are selling Registrable Securities, the Company hereby
agrees not to effect any private or public sale as distribution of any equity
securities of the Company (other than as part of such underwritten public
offering), during the period reasonably requested by such managing underwriter,
not to exceed 180 days after the effective date of the registration pursuant to
which such underwritten public offering is effected (except that the Company may
effect any sale or distribution of any such securities pursuant to a
registration on Form S-4 (if reasonably acceptable to the managing underwriter)
or Form S-8, or any successor or similar form which is then in effect).
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2.8. Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, the seller of any Registrable Securities covered by such registration
statement, its directors, officers, fiduciaries, employees and stockholders or
general and limited partners (and the directors, officers, employees and
stockholder thereof), each other Person who participates as an underwriter in
the offering or sale of such securities, each officer, director, employee,
stockholder or partner of such underwriter, and each other Person, if any, who
controls such seller or any such underwriter within the meaning of the
Securities Act, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof ("Claims") and expenses (including reasonable fees of counsel
and any amounts paid in any settlement effected with the Company's consent,
which consent shall not be unreasonably withheld or delayed) to which each such
indemnified party may become subject under the Securities Act or otherwise,
insofar as such Claims or expenses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered under the
Securities Act or 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, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus or any
amendment or supplement thereto, together with the documents incorporated by
reference therein, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospects in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 or 2.2 is being
effected (and if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or 2.2, any underwriters shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.8) to the extent permitted by law the Company,
its officers and directors, each Person
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controlling the Company within the meaning of the Securities Act and all other
prospective sellers and their directors, officers, general and limited partners
and respective controlling Persons with respect to any untrue statement or
alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf of
such Holder or underwriter, specifically stating that it is for use in such
registration statement, preliminary, final or summary prospectus or amendment or
supplement or document incorporated by reference into any of the foregoing;
provided, however, that the aggregate amount which any such Holder Shall be
required to pay pursuant to this Section 2.8(b) and Sections 2.8(c) and (e)
shall be limited to the amount of the net proceeds received by such person upon
the sale of the Registrable Securities pursuant to the registration statement
giving rise to such claim. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such indemnified party
and shall survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.8 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.8, but the failure of any indemnified party
to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.8, except to the
extent the indemnifying party is materially prejudiced thereby, and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume the
defense thereof jointly with any other indemnifying party similarly notified, to
the extent that it chooses, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party that it so chooses, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that (i) if the indemnifying party fails to take reasonable steps
necessary to defend diligently the action or proceeding within 20 business days
after receiving notice from such indemnified party that the indemnified party
believes it has failed to do so; or (ii) if such indemnified party who is a
defendant in any action or proceeding which is also brought against the
indemnifying party reasonably shall have concluded that then may be one or more
legal defenses available to such
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indemnified party which are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense as
set forth above (but with no more than one firm of counsel reasonably acceptable
to the Company for all indemnified parties in each jurisdiction, except to the
extent any indemnified party or parties reasonably shall have concluded that
there may be legal defenses available to such party which are not available to
the other indemnified parties or to the extent representation of all indemnified
parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct) and the indemnifying party shall be liable
for any expenses therefor. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
soughht hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability, or a failure to act by or
on behalf of any indemnified party and, if the indemnifying party is the
Company, such settlement, compromise or judgment is reasonably acceptable to the
Company.
(e) If for any reason the forgoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.8(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a suit of any Claim in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other from such offering of securities.
The relative fault shall be determined by reference to, among other things,
whether the untrue or 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 the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. If, however, the allocation provided
in the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the indemnifying party on the
one hand, and the indemnified party, on the other hand, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or 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 partly or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 2.8(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 2.8(e).
The amount paid or payable in respect of any Claim shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation
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(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. Notwithstanding anything in this Section 2.8(e) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to flits Section 2.8(e) to contribute any amount in excess of the net
proceeds received by such Indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate, less the amount of any indemnification
payment made pursuant to Sections 2.8(b) and (c).
(f) The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer of the
Registrable Securities by any such party.
(g) The indemnification and contribution required by this Section
2.8 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
3. Underwritten Offerings.
3.1. Requested Underwritten Offerings. If requested by the underwriters
for any underwritten offering by the Holders pursuant to a registration
requested under Section 2.1, the Company shall enter into a customary
underwriting agreement with the underwriters, Such underwriting agreement shall
be reasonably satisfactory in form and substance to the Holders which requested
such registration and shall contain such representations and warranties by, and
such other agreements on the part of, the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities and contribution agreements. Any Holder participating in the
offering shall be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holder and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such Holder.
3.2. Piggyback Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into any underwriting agreements In connection therewith, all of the Holder's
Registrable Securities to be included in such registration shall be subject to
such underwriting agreements. Any Holder participating in such registration may,
at its option, require that any or all of the representations and warranties by,
and the other agreements on the part of; the Company to end for the benefit of
such underwriters shall also be made to and for the benefit of such Holder and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holder. Such underwriting agreement shall also contain such
representations and warranties by the participating Holders as are customary in
agreements of that type.
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4. General.
4.1. Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of the
Common Stock or securities of the Company convertible into or exchangeable or
exercisable for Common Stock, the Company covenants that it will timely file the
reports required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities
Act), and will take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
4.2 Preparation: Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Holders participating in
the offering, their underwriters, if any, and their respective counsel,
accountants and other representatives and agents the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or flied with the Commission, and, to the extent practicable, each
amendment thereof or supplement thereto, and give each of them reasonable access
to its books and records and properties and such opportunities to discuss the
business of the Company and such other matters with the Company's directors,
officers and employees and the independent public accountants who have certified
its financial statements, and the Company will supply, or cause its directors
officers, employees and independent accountants to supply, all other information
reasonably requested by each of them, as shall be reasonably necessary or
appropriate, in the opinion of the Holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act it being understood that such information may be material
non-public information).
4.3. Nominees for Beneficial Owners. If Registrable Securities are held by
a nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the Holder of such Registrable Securities for purposes
of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement (or any determination of any number of
percentage of shares constituting Registrable Securities had by any holder or
Holders of Registrable Securities contemplated by this Agreement); provided that
the Company shall have received assurances reasonably satisfactory to it of such
beneficial ownership.
4.4. Notices and Other Communications. All notices, consents, requests,
instructions, approvals, documents and other communications provided for herein
shall be duly given, if in writing and delivered personally, by facsimile (with
a confirmation copy to be son by first class mail) or sent by nationally
recognized overnight courier service to:
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THE COMPANY:
Paradigm, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
APPLIED TELECOMMUNICATIONS TECHNOLOGIES INC.,
A.T.T. IV, N.V., AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
c/o Applied Telecommunications Technologies Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ & Manello, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ VENTURES III, L.P., MD STRATEGIC, L.P.,
P.V. II, L.P., SEEDLING FUND, L.P. AND STAR PARTNERS:
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ L.L.C.:
▇▇▇▇▇▇ ▇▇▇▇ L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
CRESTWOOD CAPITAL INTERNATIONAL LTD. AND
CRESTWOOD CAPITAL PARTNERS L.P.:
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
THE OTHER HOLDERS PARTY HERETO:
At the addresses therefor set forth in the books and
records maintained by the Company.
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
4.5. Amendments. This Agreement may be amended as to the Holders, and
their respective successors arid assigns, and the Company may take any action
herein prohibited, or omit to perform any act required to be performed by it, if
the Company shall obtain the written consent or waiver of the holders of at
least a majority of the then outstanding Registrable Securities. This Agreement
may not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party or parties against whom enforcement of
any waiver, change, modifications or discharge is sought or by parties with the
right to consent to such waiver, change, modification or discharge on behalf of
such party.
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4.6 Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and the respective successors and
assigns of the parties hereto, whether so expressed or not. No Person other than
a Holder shall be entitled to any benefits under this Agreement, except as
otherwise expressed, provided herein. This Agreement and the rights of the
parties hereunder may be assigned by any of the parties hereto to any transferee
of Registrable Securities.
(b) If any term, provision, covenant or restriction of this
Agreement or any exhibit hereto is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement and such exhibits shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
It is hereby stipulated end declared to be the intention of the parses that they
would have executed the remaining terms, provisions, covenants and restations
without including any of such which may be hereafter declared invalid, void or
unenforceable.
(c) Each of the parties hereto acknowledges and agrees 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 or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction to prevent breached of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, this being in addition to any
other remedy to which they may be entitled at law or equity.
(d) 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 when one or more of the counterparts have been signed by each party
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
(e) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to
conflict of laws principles.
(f) Each Holder agrees that, as to such Holder, the provisions of
this Agreement supersede the provisions of any agreements relating to the
registration of securities in any of the following agreements; each of the
Bridge Loan Subscription Agreements, dated approximately January 17, 1996,
pursuant to which the Company issued certain convertible notes and warrants, the
Subscription Agreements, dated approximately January 31, 1996, pursuant to which
the Company issued shares of Preferred Stock designated as "Series A Preferred
Stock," the Off-Shore Subscription Agreements, dated January 31, 1996, pursuant
to which the Company issued shares of Preferred Stock designated as "Series A
Preferred Stock," the Series B Subscription Agreement, dated June 11, 1995,
pursuant to which the Company issued shares of Preferred Stock designated as
"Series B Preferred Stock," the Convertible Notes, in the original principal
amount of $250,000, in the aggregate, dated September 10, 1996, issued
-20-
23
by the Company, the Series C Subscription Agreements, dated approximately
October 15, 1996, pursuant to which the Company issued shares of Preferred Stock
designated as "Series C Preferred Stock," and the Series D Subscription
Agreements, dated December 20, 1996, pursuant to which the Company issued shares
of Preferred Stock designated as "Series D Preferred Stock, and the Demand Note,
dated March 12, 1997, issued by the Company in favor of ▇▇▇▇▇▇ ▇▇▇▇ L.L.C., and
the Subscription Agreements, dated as of April 25, 1997, pursuant to which the
Company issued Demand Promissory Notes of even date therewith having an
aggregate principal amount of $1,000,000.
4.7. No Inconsistent Agreements. the Company represents and warrants to
the Holders that as of the date hereof it is not party to any agreement
containing provisions or granting rights which are inconsistent with the rights
granted by It to the Holders in this Agreement or which otherwise conflict with
the provisions hereof. The Company agrees that, after the date hereof, it will
not enter into any agreement which contains provisions or grants
-21-
24
rights which are inconsistent with the rights granted by it to the holders in
this Agreement or with otherwise conflict with the provisions hereof.
IN WITNESS WHEREOF, the Company and Holders have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized.
PARADIGM4, INC. ▇▇▇▇▇▇ ▇▇▇▇ L.L.C.
By /s/ ▇▇▇▇ ▇▇▇ By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ -------------------------------------
Name: ▇▇▇▇ ▇▇▇ Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Title: Vice President
Officer
APPLIED TELECOMMUNICATIONS A.T.T. IV, N.V.
TECHNOLOGIES, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------ -------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney-in-Fact
CRESTWOOD CAPITAL P.V. II, L.P.
INTERNATIONAL LTD.
By By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇, General Partner
Title:
CRESTWOOD CAPITAL PARTNERS L.P. MD STRATEGIC, L.P.
By By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇, General Partner
Title:
▇▇▇▇▇ ▇▇▇▇▇ VENTURES III, L.P. STAR PARTNERS
By /s/ ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
▇▇▇▇ ▇▇▇▇▇, General Partner ▇▇▇▇ ▇▇▇▇▇, Attorney-in-Fact
-22-
25
rights which are inconsistent with the rights granted by it to the holders in
this Agreement or with otherwise conflict with the provisions hereof
IN WITNESS WHEREOF, the Company and Holders have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized.
PARADIGM4, INC. ▇▇▇▇▇▇ ▇▇▇▇ L.L.C.
By /s/ ▇▇▇▇ ▇▇▇ By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ -------------------------------------
Name: ▇▇▇▇ ▇▇▇ Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Title: Vice President
Officer
APPLIED TELECOMMUNICATIONS A.T.T. IV, N.V.
TECHNOLOGIES, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------ -------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney-in-Fact
CRESTWOOD CAPITAL P.V. II, L.P.
INTERNATIONAL LTD.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, General Partner
Title: General Partner
CRESTWOOD CAPITAL PARTNERS L.P. MD STRATEGIC, L.P.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
Name: Exec. VIP. / S.P. ▇▇▇▇ ▇▇▇▇▇, General Partner
Title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ VENTURES III, L.P. STAR PARTNERS
By /s/ ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ -------------------------------------
▇▇▇▇ ▇▇▇▇▇, General Partner ▇▇▇▇ ▇▇▇▇▇, Attorney-in-Fact
-22-
26
SEEDLING FUND, L.P. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------ -------------------------------------
▇▇▇▇ ▇▇▇▇▇, Attorney-in-Fact ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PREDICTIVE VENTURES, L.P.
By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: General Partner
-23-
27
Each of the undersigned hereby executes and delivers the
Registration Rights Agreement, dated as of May 9, 1997, between Paradigm4, Inc.,
a Delaware corporation, and certain of its security holders, thereby becoming a
Holder thereunder, as of May 9, 1997.
▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By
------------------------------------ -------------------------------------
▇▇▇▇ ▇▇▇▇▇, President ▇▇▇▇ ▇▇▇▇▇
ESTATE OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
--------------------------------------- F.B.O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
By
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
By
--------------------------------------- -----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
--------------------------------------- -------------------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------- -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------- -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-24-
28
Registration Rights Agreement
Schedule I
----------------------------------------------------------------------------------------------------------------------------------
Common
Investor Address Common Series A Series B Series C Series D Series E Warrants
----------------------------------------------------------------------------------------------------------------------------------
Applied
Telecommunications 20 ▇▇▇▇▇▇▇ St.
Technologies, Inc. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 4,800 2,400
----------------------------------------------------------------------------------------------------------------------------------
Applied
Telecommunications ▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 30,000
----------------------------------------------------------------------------------------------------------------------------------
c/o Paradigm4, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,000 700
----------------------------------------------------------------------------------------------------------------------------------
c/o Applied Telecommunications
Technologies Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 200 100
----------------------------------------------------------------------------------------------------------------------------------
▇/▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
International Ltd. ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇ 4,000 2,000
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Crestwood Capital ▇▇▇ ▇▇▇▇ ▇▇▇.
Partners L.P. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 8,000 3,000
----------------------------------------------------------------------------------------------------------------------------------
c/o Paradigm4, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 2,805 200
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 25,000
----------------------------------------------------------------------------------------------------------------------------------
c/o Paradigm4, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇ LLC ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 20,000 10,000
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇
▇▇ Strategic LP ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 13,682 8,000 6,000 5,000
----------------------------------------------------------------------------------------------------------------------------------
52,500
----------------------------------------------------------------------------------------------------------------------------------
2,500
----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, ▇▇▇▇▇ & Associates ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇▇▇, ▇▇▇▇▇ Ventures ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇
III, L.P. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 5,000 3,000 5,000 37,000 4,500
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 25,000
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇
PV II, L.P. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 25,000 2,000 5,000 8,000 2,000
----------------------------------------------------------------------------------------------------------------------------------
c/o ▇▇▇▇▇, ▇▇▇▇▇ & Assoc.
▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇
Star Partners, L.P. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 8,750 2,000 5,000
----------------------------------------------------------------------------------------------------------------------------------
▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 2,800
----------------------------------------------------------------------------------------------------------------------------------
c/o Paradigm4, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,000 100
----------------------------------------------------------------------------------------------------------------------------------