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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Allin Communications Corporation
--------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
019924 10 9
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(CUSIP Number)
Copy to:
Thomas D. Wright Bryan D. Rosenberger
500 Greentree Commons Eckert Seamans Cherin & Mellott, LLC
381 Mansfield Avenue 44th Floor, 600 Grant Street
Pittsburgh, PA 15220 Pittsburgh, PA 15219
(412) 928-8800 (412) 566-6000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 1998
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
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SCHEDULE 13D
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CUSIP NO. 019924 10 9
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1 NAME OF REPORTING PERSON: Thomas D. Wright
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: United States
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7 SOLE VOTING POWER: 358,519
NUMBER OF
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: - 0 -
OWNED BY
-----------------------------------------------------------
EACH
9 SOLE DISPOSITIVE POWER: 358,519
REPORTING
PERSON -----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER: - 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 358,519
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 5.84%
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14 TYPE OF REPORTING PERSON: IN
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This statement amends Items 3, 4, 5, 6 and 7 of the Schedule 13D of
Thomas D. Wright (the "Reporting Person") dated November 6, 1996, as amended by
Amendment No. 1 thereto dated January 2, 1998 (as so amended, the "Schedule
13D"). All capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
On August 13, 1998, the Reporting Person purchased from the Company
with his personal funds 200 shares of the Company's Series B Redeemable
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"), and
a related warrant to purchase shares of Common Stock (the "Warrant"), for an
aggregate purchase price of $200,000. On December 31, 1998, the Company's
stockholders approved the Company's issuance of shares of Common Stock upon
conversion of the Series B Preferred Stock and upon exercise of the Warrant.
See Item 5.
Item 4. Purpose of Transaction.
The Reporting person purchased the shares of Series B Preferred Stock
and the Warrant in order to facilitate the Company's August 13, 1998 acquisition
of all of the issued and outstanding capital stock of KCS Computer Services,
Inc. (which has subsequently been renamed Allin Consulting of Pennsylvania,
Inc.). The Reporting Person has no present plans or proposals to change the
Company's business, corporate structure, capitalization, management or dividend
policy.
The Reporting Person has no present plans or proposals which relate to
or would result in any of the following (although the Reporting Person reserves
the right to develop such plans or proposals or any other plans relating to the
Company and to take action with respect thereto): (i) the acquisition by any
person of additional securities of the Company, or the disposition of securities
of the Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (iv) any change in the present board of directors or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; (v) any
material change in the present capitalization or dividend policy of the Company;
(vi) any other material change in the Company's business or corporate structure;
(vii) changes in the Company's certificate of incorporation, bylaws, or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (viii) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) a class of equity securities of
the Company becoming eligible for termination
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of registration pursuant to Section 12(g)(4) of the Exchange Act; or (x) any
action similar to any of those enumerated above.
The Reporting Person, without the consent of the Company, may purchase
additional shares of Common Stock in the open market or in private transactions
at any time. Following the stockholder approval referred to in Item 3., the
Reporting Person also has the right to convert the shares of Series B Preferred
Stock into shares of Common Stock and to exercise the Warrant for Common Stock.
Item 5. Interest in Securities of Issuer.
The number of shares Common Stock issued and outstanding and the
percentage calculations resulting therefrom in this Item 5 are based on the
Company's representation as to the number of shares of Common Stock outstanding.
The shares of Series B Preferred Stock held by the Reporting Person
are convertible into at least 55,363 shares of Common Stock, but no more than
100,000 shares of Common Stock, and the Warrant is exercisable for 47,059 shares
of Common Stock.
The Reporting Person beneficially owns and has sole voting and
dispositive power with respect to 211,460 shares of Common Stock representing
approximately 3.53% of the Common Stock outstanding. The Reporting Person may
also be deemed to own the maximum 100,000 shares of Common Stock into which the
200 shares of Series B Preferred Stock owned by the Reporting Person may be
converted and the 47,059 shares of Common Stock for which the Warrant may be
exercised. Therefore, the Reporting Person may be deemed to beneficially own an
aggregate of 358,519 shares of Common Stock representing approximately 5.84% of
the Common Stock outstanding, assuming that the maximum 100,000 shares of Common
Stock issuable upon conversion of Series B Preferred Stock and the 47,059
issuable upon exercise of the Warrant are currently issued and outstanding.
The shares being reported as beneficially owned by the Reporting
Person do not include 5,000 shares held by the Reporting Person's spouse and
40,000 shares held by trusts of which such spouse is a trustee.
The Reporting Person also owns 1,764.7059 shares of the Company's
Series A Convertible Redeemable Preferred Stock (the "Series A Preferred Stock")
which, until December 6, 1997, were convertible into 14,365 shares of Common
Stock. Such conversion right has now lapsed, and the Reporting Person is no
longer deemed to beneficially own the 14,365 shares of Common Stock into which
such shares of Series A Preferred Stock had been convertible.
No transactions in Common Stock were effected during the past 60 days
by the Reporting Person.
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Item. 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
As discussed in Items 3 and 5, the Reporting person holds a Warrant to
purchase 47,059 shares of Common Stock at an exercise price of $4.25 per share.
Payment of the exercise price may be made in cash or by delivery to the Company
of shares of Series A Preferred Stock having an aggregate liquidation value plus
accrued and unpaid dividends, if any, equal to the exercise price for the number
of shares to be purchased upon exercise. The Warrants will expire on August 13,
2003.
The Reporting Person, the Company and the other holders of Series B
Preferred Stock are parties to a Preemptive Rights Agreement dated August 13,
1998 pursuant to which the Company granted to such holders certain pro rata
preemptive rights for one year to subscribe for securities being issued by the
Company in connection with certain future equity financings.
The Reporting Person, the Company and the other holders of Series B
Preferred Stock are parties to a Registration Rights Agreement dated August 13,
1998 pursuant to which the Company granted to such holders certain rights to
require the Company to register the shares of Common Stock acquired upon
conversion of the shares of Series B Preferred Stock owned by the Reporting
Person and upon exercise of the Warrant under the Securities Act of 1933, as
amended, for public offering and sale.
Item 7. Material to be Filed as Exhibits.
The following are filed as exhibits to this Amendment No. 3 to the
Schedule 13D:
A. Warrant, dated August 13, 1998, to purchase 47,059 shares of Common Stock.
B. Preemptive Rights Agreement, dated August 13, 1998, among the Company and
the holders of Series B Preferred Stock.
C. Registration Rights Agreement, dated August 13, 1998, among the Company
and the holders of Series B Preferred Stock.
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Signatures.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
December 31, 1998 By: /s/ Thomas D. Wright
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Date Thomas D. Wright
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EXHIBIT A
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
SECURITIES LAWS OF ANY STATE, HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO APPLICABLE PROVISIONS OF
FEDERAL AND STATE SECURITIES LAWS OR EXEMPT FROM THE REGISTRATION REQUIREMENTS
THEREOF.
No. 4 WARRANT
VOID AFTER 5:00 p.m., Pittsburgh, Pennsylvania Time, on the earlier of December
31, 1998 if all outstanding shares of Series B Preferred Stock of Allin
Communications Corporation are required to be redeemed as of such date or August
13, 2003.
Warrant to Purchase 47,059
Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
ALLIN COMMUNICATIONS CORPORATION
This is to certify that, for valuable consideration, receipt of which
is hereby acknowledged, Thomas D. Wright (the "Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from ALLIN COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"), 47,059 fully paid and
nonassessable shares of the Common Stock, $.01 par value per share, of the
Company (the "Stock"), subject to adjustment as hereinafter set forth, at such
price, during such period and subject to such terms as hereinafter set forth.
Unless the context otherwise requires, the term "Warrant" or "Warrants" as used
herein includes this Warrant and any other Warrant or Warrants which may be
issued pursuant to the provisions of this Warrant, whether upon transfer,
assignment, partial exercise, divisions, combinations, exchange or otherwise,
and the term "Holder" includes any transferee or transferees or assignee or
assignees of the Holder named above, all of whom shall be subject to the
provisions of this Warrant, and, when used with reference to shares of Stock,
means the holder or holders of such shares of Stock. This Warrant is issued
pursuant to the terms of that certain Subscription Agreement dated as of August
12, 1998 between the original Holder and the Company.
<PAGE>
Section 1. Exercise Price. Subject to the provisions with respect to
adjustment in Section 7, the purchase price for each share of Stock purchasable
pursuant hereto shall be $4.25 per share (hereinafter, as adjusted from time to
time as herein required, the "Exercise Price").
Section 2. Exercise of Warrant.
(a) This Warrant may only be exercised pursuant to this Section 2 from
and after the date on which the holders of the outstanding Stock approve the
issuance of Stock upon exercise pursuant to this Section 2.
(b) This Warrant may be exercised, in whole or in part at any time or
from time to time, on or prior to 5:00 p.m., Pittsburgh, Pennsylvania time, on
the earlier to occur of (i) December 31, 1998 if all outstanding shares of
Series B Preferred Stock of the Company are required to be redeemed by the
Company as of such date or (ii) August 13, 2003, or if such date is a day on
which federal or state chartered banking institutions located in the
Commonwealth of Pennsylvania are authorized by law to close, then on the next
succeeding day which shall not be such a day, by presentation and surrender to
the Company at its principal office in Pennsylvania of this Warrant and the
purchase form annexed hereto duly executed and accompanied by payment, in cash,
certified or cashier's check payable to the order of the Company or shares of
Series A Convertible Redeemable Preferred Stock of the Company ("Series A
Preferred Stock"), of the Exercise Price for the number of shares of Stock to be
purchased upon exercise of the Warrant. If payment is made by delivery of
shares of Series A Preferred Stock, the number of shares of Series A Preferred
Stock so delivered must have an aggregate liquidation value plus accrued and
unpaid dividends, if any, equal to the exercise price for the number of shares
of Stock to be purchased upon exercise of the Warrant. If this Warrant is
exercised in part only, the Company shall, promptly after presentation of this
Warrant upon such exercise, execute and deliver a new Warrant evidencing the
rights of the Holder hereof to purchase the unexercised balance of this Warrant.
Upon and as of such receipt of this Warrant and the purchase form by the Company
at its principal office in Pennsylvania, in proper form for exercise and
accompanied by payment as herein provided, the Holder shall be deemed to be the
holder of record of the shares of Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Stock shall not then be
actually delivered to the Holder.
Section 3. Covenants of Company. The Company represents, warrants,
covenants and agrees as follows:
(a) All Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance in accordance with the
provisions of this Warrant, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issuance).
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(b) The Company will at all times until expiration of this Warrant
reserve and keep available, free from preemptive rights, out of its authorized
but unissued capital stock (or capital stock held in treasury), a number of
shares of Stock equal to the total number of shares of Stock issuable upon
exercise of this Warrant.
(c) The Company acknowledges and agrees that, pursuant to a
Registration Rights Agreement dated the date hereof among the Company, the
Holder and other holders of warrants, the Holder has certain registration rights
with respect to the shares of Stock issuable upon exercise of this Warrant.
Section 4. Fractional Shares. No fractional shares of Stock or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional shares to which the Holder would otherwise
be entitled upon exercise hereof, the Company shall pay to the Holder an amount
in cash equal to such fraction multiplied by the Exercise Price.
Section 5. Transfer, Exchange, Assignment or Loss of Warrant.
5.1 This Warrant may not be assigned or transferred except as
provided in this Section 5 and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (said Act and such Rules and Regulations being
hereinafter collectively referred to as the "Act"). Any purported transfer or
assignment made other than in accordance with this Section 5 shall be null and
void and of no force and effect.
5.2 Prior to any transfer of this Warrant, other than in an offering
registered under the Act, the Holder shall notify the Company in writing of its
intention to effect such transfer, indicating the circumstances of the proposed
transfer and furnish the Company with an opinion of its counsel, which counsel
and opinion shall be reasonably satisfactory to the Company, to the effect that
the proposed transfer may be made without registration under the Act or
registration or qualification under any applicable state securities laws. The
Company will promptly notify the Holder if the opinion of counsel furnished to
the Company is reasonably satisfactory to the Company. Unless the Company
notifies the Holder within 10 business days after its receipt of such opinion
that such opinion is not reasonably satisfactory to counsel for the Company, the
Holder may proceed to effect the transfer.
5.3 Each certificate for shares of Stock or for any other security
issued or issuable upon exercise of this Warrant shall contain the following
legend (unless the Company shall have received an opinion of counsel reasonably
satisfactory to it that such legend is not required to assure compliance with
the Act):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR SECURITIES LAWS OF ANY
<PAGE>
STATE, HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR
SALE IN CONNECTION WITH ANY DISTRIBUTION AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO APPLICABLE
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR EXEMPT FROM THE
REGISTRATION REQUIREMENTS THEREOF.
The Holder, by accepting this Warrant, agrees and represents that,
unless the shares of Stock to be issued to such Holder upon exercise hereof
shall have been registered under the Act prior to the delivery thereof to such
Holder, it will acquire such shares for investment and not with a view to their
distribution.
5.4 Any assignment permitted hereunder shall be made by surrender of
this Warrant to the Company at its principal office in Pennsylvania with the
assignment form annexed hereto duly completed and executed. In such event the
Company shall, without charge for any issuance or transfer tax or other costs
incurred by the Company with respect to such transfer, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other Warrants which carry the same rights upon presentation
thereof at the principal office of the Company in Pennsylvania together with a
written notice signed by the Holder thereof, specifying the names and
denominations in which new Warrants are to be issued.
5.5 Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant (provided that an
affidavit of the Holder shall be satisfactory for such purpose), and of
indemnity satisfactory to it and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date and any such lost, stolen or destroyed Warrant shall
thereupon become void.
Section 6. Rights of Holder. Any Holder of this Warrant shall not, by
virtue hereof, be entitled to any rights of a stockholder in the Company, either
at law or in equity, and the rights of any such Holder are limited to those
expressed in this Warrant and are not enforceable against the Company except to
the extent set forth herein.
Section 7. Adjustment in the Number of Warrant Shares Purchasable and
Exercise Price.
7.1 The number of shares of Stock or other securities or property for
which this Warrant may be exercised and the Exercise Price shall be subject to
adjustments as follows:
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(a) If the Company, at any time or from time to time, effects a
subdivision or combination, by stock split, reverse stock split or otherwise, of
its outstanding shares of Stock into a larger or smaller number of shares of
Stock, the number of shares of Stock for which this Warrant may be exercised
immediately prior to such subdivision or combination shall be increased or
reduced in the same proportion as the increase or decrease in the outstanding
shares of Stock and the then applicable Exercise Price shall be adjusted by
multiplying such Exercise Price by a fraction, the numerator of which shall be
the number of shares of Stock purchasable upon exercise hereof immediately prior
to such subdivision or combination and the denominator of which shall be the
number of shares of Stock purchasable immediately following such subdivision or
combination. Any adjustment under this Paragraph (a) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.
(b) If the Company, at any time or from time to time, declares a
dividend on Stock payable in Stock or securities convertible into Stock the
number of shares of Stock for which this Warrant may be exercised shall be
increased, as of the close of business on the record date for determining which
holders of Stock shall be entitled to receive such dividend, in proportion to
the increase in the number of outstanding shares of Stock as a result of such
dividend (treating for this purpose any securities convertible into Stock as so
converted) and the then applicable Exercise Price shall be adjusted by
multiplying such Exercise Price by a fraction, the numerator of which shall be
the number of shares of Stock purchasable upon exercise hereof immediately prior
to the record date for such dividend and the denominator of which shall be the
number of shares of Stock purchasable immediately following the record date for
such dividend (treating for this purpose any securities convertible into Stock
as so converted).
(c) If the Company at any time or from time to time makes, or fixes a
record date for the determination of holders of Stock entitled to receive, a
dividend or other distribution payable in securities of the Company other than
shares of Stock or securities convertible into Stock, then and in each such
event provision shall be made so that the Holder shall receive upon exercise
hereof, in addition to the number of shares of Stock receivable thereupon, the
amount of securities of the Company which it would have received had this
Warrant been exercised on the date of such event and had it thereafter, during
the period from the date of such event to and including the date of exercise,
retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this
Section 7 with respect to the right of the Holder.
(d) If the Stock issuable upon the exercise of this Warrant is changed
into the same or a different number of shares of any class or classes of stock
of the Company or property, whether by recapitalization, reclassification or
other exchange (other than a subdivision or combination of shares, or a stock
dividend, or a reorganization, merger, consolidation or sale of assets provided
for elsewhere in this Section 7), then and any in such event the Holder shall
have the right thereafter to purchase the kind and amount of stock and other
securities and property receivable upon such recapitalization, reclassification
or other
<PAGE>
exchange by holders of the number of shares of Stock with respect to which this
Warrant might have been exercised immediately prior to such recapitalization,
reclassification or other exchange, all subject to further adjustments as
provided herein.
(e) If at any time or from time to time there is a capital
reorganization of the Stock (other than a subdivision or combination of shares
or a stock dividend or recapitalization, reclassification or exchange of shares
provided for elsewhere in this Section 7) or a consolidation or merger of the
Company with or into another entity or the sale of all or substantially all of
the Company's assets to another person, then, as part of such capital
reorganization, consolidation, merger or sale, provision shall be made so that
the Holder shall thereafter be entitled to receive upon exercise of this Warrant
the same kind and number of shares of Stock and other securities, cash or other
property as would have been distributed to the Holder upon such reorganization,
reclassification, consolidation, merger or sale had the Holder exercised this
Warrant immediately prior to such reorganization, reclassification,
consolidation, merger or sale. The Holder shall pay upon such exercise the
Exercise Price that otherwise would have been payable pursuant to the terms of
this Warrant. Appropriate adjustment shall be made in the application of the
provisions of this Section 7 with respect to the rights of the Holder after the
reorganization, consolidation, merger or sale to the end that the provisions of
this Section 7 (including adjustment of the Exercise Price then in effect and
the number of shares or securities deliverable upon exercise of this Warrant)
shall be applicable after that event and shall be nearly equivalent to the
provisions hereof as may be practicable. If any such reorganization,
reclassification, consolidation, merger or sale results in a cash distribution
in excess of the Exercise Price provided by this Warrant, the Holder may, at the
Holder's option, exercise this Warrant without making payment of the Exercise
Price, and in such case the Company shall, upon distribution to the Holder,
consider the Exercise Price to have been paid in full, and in making settlement
to the Holder, shall deduct an amount equal to the Exercise Price from the
amount payable to the Holder.
7.2 If the Company shall, other than as provided in Paragraph (e) of
Section 7.1, dissolve, liquidate or wind up its affairs, the Holder shall
thereafter have the right to receive upon proper exercise of this Warrant, in
lieu of the shares of Stock of the Company that the Holder otherwise would have
been entitled to receive, the same kind and amount of securities or assets as
would have been issued, distributed or paid to the Holder upon any such
dissolution, liquidation or winding up with respect to such shares of Stock of
the Company had the Holder been the holder of record of such shares of Stock
receivable upon exercise of this Warrant on the date for determining those
entitled to receive any such distribution.
7.3 In each case of an adjustment or readjustment of the Exercise
Price or the number of shares of Stock or other securities issuable upon
exercise of this Warrant, the Company, at its expense, shall promptly cause
independent public accountants of recognized standing selected by the Company
(who may be the independent public accountants then auditing the books of the
Company) to compute such adjustment or readjustment in
<PAGE>
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall promptly mail such certificate, by first
class mail, postage prepaid, to the Holder at the Holder's address as shown in
the Company's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based.
7.4 At the request of the Holder and upon surrender of this Warrant,
the Company shall reissue this Warrant in a form conforming to the adjustment or
change made pursuant to this Section 7.
Section 8. Notices to Warrant Holder. In the event of: (i) any taking
by the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution or any right to subscribe for, purchase or
otherwise acquire any shares of Stock of any class or any other securities or
property, or to receive any other rights; (ii) any capital reorganization of the
Company, any reclassification or recapitalization of the Stock of the Company or
any transfer of all or substantially all of the assets of the Company to any
other person or any consolidation or merger involving the Company and any other
person; or (iii) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; then the Company shall give to the Holder of this
Warrant a notice specifying the date or expected date of any such taking of a
record or other event and describing the same in reasonable detail. Such notice
shall be given at least 20 days prior to the date therein specified.
Section 9. Governing Law. This Warrant shall be construed in
accordance with the laws of the State of Delaware applicable to contracts
executed and to be performed wholly within such state.
Section 10. Notice. Notices and other communications to be given to
the Holder of this Warrant or to the Company shall be deemed to be sufficiently
given if delivered by hand or mailed, registered or certified mail, postage
prepaid, to the following address:
If to the Holder: Thomas D. Wright
Eckert Seamans Cherin & Mellott, LLC
600 Grant Street, 42nd Floor
Pittsburgh, PA 15219
If to the Company: Allin Communications Corporation
400 Greentree Commons
381 Mansfield Avenue
Pittsburgh, PA 15220
Attn: Richard W. Talarico
<PAGE>
or such other address as the Holder or the Company shall have designated by
written notice to the other as herein provided. Notice by mail shall be deemed
given when deposited in the United States mail, postage prepaid, as herein
provided.
Section 11. Amendment. No amendment to this Warrant shall be valid
unless contained in a writing duly executed by the Holder and the Company.
IN WITNESS WHEREOF, the Company has executed this Warrant as of August
13, 1998.
ALLIN COMMUNICATIONS CORPORATION
By: /s/ Richard W. Talarico
Title: Chairman and CEO
<PAGE>
PURCHASE FORM
-------------
Dated
------------, ----
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing shares of Stock and hereby makes payment of
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$ in payment of the actual exercise price thereof.
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
--------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
--------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signature:
------------------------
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, hereby sells, assigns and
--------------------
transfers unto
Name
--------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
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the right to purchase Stock represented by this Warrant to the extent of
shares of Stock and does hereby irrevocably constitute and appoint
- ----------
, attorney, to transfer the same on the books of the Company
- --------------------
with full power of substitution in the premises.
Signature:
------------------------
Dated:
-----------, ----
<PAGE>
EXHIBIT B
PREEMPTIVE RIGHTS AGREEMENT
This PREEMPTIVE RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of this 13th day of August, 1998, by and among ALLIN COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company") and those persons whose
names appear on the signature page hereof (each a "Subscriber," and
collectively, the "Subscribers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, concurrently with the execution of this Agreement and pursuant to
the terms of certain Subscription Agreements (the "Subscription Agreements),
Subscribers have agreed to purchase from the Company, and the Company has agreed
to sell and issue to Subscribers, shares of Series B Redeemable Preferred Stock,
par value $.01 per share, of the Company (the "Series B Preferred Stock") and
warrants (the "Warrants") to purchase shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"); and
WHEREAS, the parties believe it to be to their mutual benefit to provide
for a plan for certain terms of future equity financings by the Company.
NOW, THEREFORE, in consideration of the premises and the mutual independent
covenants contained herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE I
INTERPRETATION OF THIS AGREEMENT
1.1 Certain Defined Terms. As used in this Agreement:
"Approved Stock Plan" means (i) the Company's 1996 Stock Plan and (ii)
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the Company's 1997 Stock Plan.
"Board" means the board of directors of the Company.
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"Capital Stock" means the capital stock of the Company.
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"Capital Stock Equivalents" means options or rights to acquire any
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shares of Capital Stock or any securities convertible into or exchangeable for
Capital Stock.
"Person" means an individual, corporation, partnership, joint venture,
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trust or unincorporated organization or association, joint stock company or
other similar organization,
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government or any political subdivision thereof, court, or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Underlying Shares" means shares of Capital Stock issuable upon
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exercise, exchange or conversion of Capital Stock Equivalents.
1.2 Headings. The article and section titles herein are for
convenience only and do not define, limit or construe the contents of such
articles and sections.
ARTICLE II
PREEMPTIVE RIGHTS
2.1 Grant of Rights. If at any time following the date hereof the
Company proposes to sell any shares of Capital Stock or Capital Stock
Equivalents, the Company will first offer to each Subscriber the right to
purchase up to the number of shares of Capital Stock (or in the case of a sale
of Capital Stock Equivalents, such Capital Stock Equivalents whose Underlying
Shares are) equal to the product of (a) the number of shares of Capital Stock
(or Underlying Shares with respect to the Capital Stock Equivalents) proposed to
be sold by the Company multiplied by (b) a fraction, the numerator of which is
the number of shares of Series B Preferred Stock purchased by the Subscriber on
the date hereof and the denominator of which is the total number of shares of
Series B Preferred Stock issued as of the date hereof, for the same price and on
the same economic terms as the securities are being offered in such transaction.
If noncash consideration is proposed to be received for the securities, the
price for purposes of the preceding sentence shall be the sum of any cash to be
received plus the fair market value of the noncash property to be received, as
determined in good faith by the Board.
2.2 Notice to Subscribers. The Company will cause to be given to
each Subscriber a written notice directed to each Subscriber setting forth a
description of the securities being offered, the price and other economic terms
at which the Subscriber may purchase such securities and the calculation made as
to the number of securities that the Subscriber has the right to purchase,
whereupon the Subscriber shall have a period of two (2) business days from the
date such notice is given to give written notice to the Company that he or it
desires to exercise his or its right to purchase the securities. Capital Stock
or any Capital Stock Equivalents which have been offered in accordance with this
Article II to each Subscriber and with respect to which, within the applicable
period specified above, a Subscriber has not given notice to the Company that he
or it desires to exercise its right to purchase, may thereafter, for a period
not exceeding three months following the expiration of such period, be issued,
sold or subjected to rights or options to any other Person at a price not less
than that at which they were offered to the declining Subscriber. Any such
securities not so issued, sold or subjected to rights or options to others
during such three-month period will thereafter again be subject to the first
refusal rights provided for in this Article II.
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2.3 Exceptions. Anything in this Agreement to the contrary
notwithstanding, the provisions of this Article II shall not be applicable to
(i) the granting of options or the issuance of Capital Stock pursuant to an
Approved Stock Plan, (ii) the issuance of the Series B Preferred Stock and the
Warrants pursuant the Subscription Agreements, (iii) the issuance of Capital
Stock pursuant to the declaration or payment of any dividend on the Capital
Stock payable in shares of Capital Stock, (iv) the issuance of Capital Stock to
a seller as consideration for the purchase of equity interests or assets of an
entity unaffiliated with the Company whether pursuant to a merger or otherwise,
(v) the issuance of Underlying Shares or (vi) securities offered to all holders
of a particular class of outstanding Capital Stock on a pro rata basis whether
pursuant to an exchange offer or otherwise.
2.4 Termination of Preemptive Rights. Anything in this Agreement to
the contrary notwithstanding, the provisions of this Article II shall terminate
and be of no force or effect on the earliest of (i) the first anniversary of the
date hereof or (ii) with respect to any particular Subscriber, such time as such
Subscriber shall have declined to exercise his or its preemptive rights in
connection with two separate and distinct proposed sales, with respect to which
(a) the Subscriber received notices in accordance with Section 2.2 and (b) the
Company actually sold securities to other Persons in accordance with the terms
set forth in such notices and in accordance with this Article II.
ARTICLE III
MISCELLANEOUS
3.1 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of the
Subscribers holding a majority of the outstanding shares of Series B Preferred
Stock and outstanding shares of Common Stock into which shares of Series B
Preferred Stock have been converted; provided, however, that no amendment,
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modification or supplement or waiver or consent to the departure with respect to
the provisions of Article II hereof shall be effective as against any Subscriber
unless consented to in writing by such Subscriber.
3.2 Successors, Assigns and Transferees. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective representatives, administrators, heirs, successors and permitted
assigns, as applicable; provided, however, that no Subscriber may assign, by
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operation of law or otherwise, to any Person his or its rights hereunder without
the prior written consent of the Company.
3.3 Notices. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
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if to the Company, to:
Allin Communications Corporation
400 Greentree Commons
381 Mansfield Avenue
Pittsburgh, PA 15220
Attention: Richard W. Talarico
FAX: (412) 928-0225
if to a Subscriber, to:
the most recent address of such Subscriber on the books of the
Company
All such notices and communications shall be deemed to have been given or
made (i) when delivered by hand, (ii) two business days after being
deposited in the mail, postage prepaid, (iii) when telexed, answer-back
received or (iv) when telecopied, receipt acknowledged.
3.4 Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause, phrase or sentence in
every other respect and of the remaining provisions, paragraphs, words, clauses,
phrases or sentences hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
3.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
3.6 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to the conflicts of laws rules thereof.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
ALLIN COMMUNICATIONS CORPORATION
By: /s/ Richard W. Talarico
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Title: Chairman and Chief Executive Officer
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SUBSCRIBERS
/s/ Henry Posner, Jr.
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/s/ Thomas D. Wright
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/s/ Richard W. Talarico
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/s/ William C. Kavan
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/s/ James C. Roddey
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of this 13th day of August, 1998, by and among ALLIN COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company") and those persons whose
names appear on the signature page hereof (collectively, the "Subscribers").
W I T N E S S E T H:
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WHEREAS, concurrently with the execution of this Agreement, Subscribers
have agreed to purchase from the Company, and the Company has agreed to sell and
issue to Subscribers, shares of Series B Redeemable Preferred Stock, par value
$.01 per share, of the Company (the "Series B Preferred Stock") and warrants
(the "Warrants") to purchase shares of common stock, par value $.01 per share,
of the Company (the "Common Stock"); and
WHEREAS, the Series B Preferred Stock and the Warrants will be issued to
the Subscribers without registration under the Securities Act of 1933, as
amended, and applicable state securities laws, and the Company and the
Subscribers desire to provide hereunder for compliance therewith and for the
possible registration of the shares of Common Stock issuable upon conversion of
the Series B Preferred Stock and/or upon exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual independent
covenants contained herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following capitalized
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terms have the meanings set forth below:
Applicable Period - In the case of a Shelf Registration Statement, the
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period referred to in Section 2.1(a)(ii), and in the case of any other
Registration Statement, nine months or such shorter period as is necessary
to complete the distribution of the Registrable Securities covered thereby.
Conversion Shares - The shares of Common Stock (i) issued to Qualified
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Holders upon conversion of shares of Series B Preferred Stock into shares
of Common Stock, (ii) issued to Qualified Holders upon exercise of the
Warrants and (iii) any shares of Common Stock issued as a stock dividend or
in a stock split or in connection with any
<PAGE>
other stock combination or division in respect of the Conversion Shares
issued upon such conversion and/or exercise.
Demand - As defined in Section 2.1(a)(i) hereof.
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Exchange Act - The Securities Exchange Act of 1934, as amended, or
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similar federal statute then in effect, and a reference to a particular
section thereof or regulation thereunder shall be deemed to include a
reference to the comparable section, if any, of, or regulation, if any,
under, any such similar federal statute.
Majority Holders - Qualified Holders holding a majority of the
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Registrable Securities included in a Shelf Registration Statement.
Notice of Demand - As defined in Section 2.1(a)(i) hereof.
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Person - An individual, partnership, joint venture, corporation,
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trust, unincorporated organization or government or any department or
agency thereof.
Piggy-back Registration - A registration of Conversion Shares pursuant
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to Section 2.1(b) hereof.
Qualified Holder - Each Subscriber so long as it or he holds any of
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the Conversion Shares and each Person to whom a Subscriber or a Qualified
Holder transfers such Conversion Shares.
Prospectus - The prospectus included in a Registration Statement,
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including any preliminary prospectus, and any such Prospectus as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by a
Registration Statement, and by all other amendments and supplements to such
Prospectus, including post-effective amendments, and in each case including
all exhibits thereto and all material incorporated by reference therein.
Registrable Securities - Any Conversion Shares issued to, and held by,
----------------------
a Qualified Holder. As to any Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement or, if earlier,
when the Applicable Period shall have expired with respect to such
securities; (ii) they shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act; (iii) new
certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the
Securities Act or any similar state law then in force; or (iv) they shall
have ceased to be outstanding.
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Registration Statement - The Shelf Registration Statement, any
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registration statement registering shares held by Qualified Holders
pursuant to Section 2.1(b) hereof and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
SEC - The Securities and Exchange Commission.
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Securities Act - The Securities Act of 1933, as amended, or similar
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federal statute then in effect, and a reference to a particular section
thereof or regulation thereunder shall be deemed to include a reference to
the comparable section, if any, of, or regulation, if any, under, such
similar federal statute.
Seller - As defined in Section 2.1(g) hereof.
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Shelf Registration - A registration required to be effected pursuant
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to Section 2.1(a).
Shelf Registration Statement - A "shelf" registration statement of the
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Company pursuant to the provisions of Section 2.1(a) of this Agreement
which covers Registrable Securities and is filed on Form S-3 under Rule 415
under the Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
Underwriter - A person who acts as an underwriter with respect to any
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registration of securities pursuant to this Agreement.
Underwritten Offering - A sale of securities of the Company to an
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Underwriter or Underwriters for reoffering to the public.
ARTICLE II
REGISTRATION RIGHTS
2.1 Registration.
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(a) Shelf Registration.
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(i) At any time from the date on which any Conversion Shares may
be issued until the fifth anniversary of the initial issuance of the
Series B Preferred Stock and the Warrants, one or more Qualified
Holders holding in the
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aggregate at least the number of Conversion Shares equal to ten
percent of the Conversion Shares that may or have been issued (as
adjusted for stock splits, stock dividends, reverse stock splits or
any other combination or division of the Conversion Shares) will be
entitled to deliver to the Company, on one occasion, a written notice
(a "Demand") requesting a Shelf Registration. Upon receipt of a
Demand, the Company will deliver to each Qualified Holder a written
notice (the "Notice of Demand") which shall include a copy of the
Demand together with a statement to the effect that the Company will
include all Registrable Securities in a Shelf Registration pursuant to
this Section 2.1(a) unless the Company receives, by a date specified
in the Notice of Demand (which shall be no less than 20 days following
the delivery of such Notice of Demand), a notice from a Qualified
Holder to exclude all or a portion of such Qualified Holder's
Registrable Securities from such Shelf Registration. Following
receipt of a Demand, the Company shall, as expeditiously as reasonably
possible, use its best efforts to effect a Shelf Registration of all
Registrable Securities except those which a Qualified Holder has on a
timely basis requested to be excluded from such Shelf Registration and
those of any Qualified Holder who does not provide information
reasonably requested by the Company in connection with the Shelf
Registration Statement. The Company may, at its option, include in
such Shelf Registration Statement shares held by any shareholder other
than the Qualified Holders having rights similar to those contained in
this Section 2.1(a).
(ii) The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for a period of two
years following the date on which such Shelf Registration Statement is
initially declared effective or such shorter period which will
terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Company further agrees, if necessary, to
supplement or amend the Shelf Registration Statement, if required by
the rules, regulations or instructions applicable to the registration
form used by the Company for such Shelf Registration Statement or by
the Securities Act or by any other rules and regulations thereunder
for shelf registration.
(iii) On one occasion, the Majority Holders of the Registrable
Securities covered by a Shelf Registration Statement may elect to have
such Registrable Securities sold in an Underwritten Offering. In such
event, the Company shall be entitled to engage an investment banking
firm selected by the Company to serve as Underwriter.
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(b) Piggy-back Registration.
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(i) If the Company at any time prior to the seventh anniversary
of the original issuance of the Series B Preferred Stock and the
Warrants proposes to register any of its securities for an
Underwritten Offering under the Securities Act (other than pursuant to
a Shelf Registration), whether or not for sale for its own account,
and if the registration form proposed to be used may be used for the
registration of Registrable Securities, the Company will each such
time give prompt written notice to all Qualified Holders of its
intention to do so. Upon the written request of any such Qualified
Holder made within 30 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be
disposed of by such Qualified Holder), the Company will use its best
efforts to cause all such Registrable Securities as to which Qualified
Holders requested registration to be registered under the Securities
Act (with the securities which the Company at the time proposes to
register), so as to permit the sale or other disposition by such
Qualified Holders of such Registrable Securities.
(ii) No registration effected pursuant to this Section 2.1(b)
shall be deemed to have been effected pursuant to Section 2.1(a)
hereof.
(iii) Notwithstanding anything to the contrary in this Section
2.1(b), the Company shall have the right to discontinue any Piggy-back
Registration at any time prior to the effective date of such Piggy-
back Registration if the registration of other securities giving rise
to such Piggy-back Registration is discontinued; but no such
discontinuation shall preclude an immediate or subsequent request for
a Shelf Registration.
(c) Registration Procedures. If the Company is required by the
-----------------------
provisions of this Section 2.1 to use its best efforts to effect or cause
the registration of any Registrable Securities under the Securities Act as
provided in this Section, the Company will, as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities and use its best efforts to
cause such registration statement to become and remain effective
during the Applicable Period; in the case of a Shelf Registration
Statement, such Registration Statement shall be (A) reasonably
acceptable to special counsel for the Qualified Holders and (B)
available for the sale of Registrable Securities in accordance with
the intended method or methods of distribution of the selling
Qualified Holders (subject to the limitation set forth in Section
2.1(a)(iii) hereof);
(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement as may be necessary to keep
such Registration Statement effective for the Applicable Period and to
comply with the provisions
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of the Securities Act with respect to the sale or other disposition of
all securities covered by such Registration Statement during the
Applicable Period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
Registration Statement;
(iii) furnish to each seller of such Registrable Securities and,
in the case of an Underwritten Offering, each Underwriter of the
securities being sold by such seller, such number of copies of such
Registration Statement, such number of copies of the Prospectus
included in such Registration Statement and such 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 (including any Prospectus amended or
supplemented as set forth in Section 2.1(c)(vi));
(iv) use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as any seller and
each Underwriter of the securities being sold by such seller shall
reasonably request, and do any and all other acts and things which may
be necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of such Registrable
Securities owned by such seller; provided, the Company shall not for
any such purpose be required to (A) qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but
for the requirements of this Section 2.1(c)(iv) be obligated to be
qualified, (B) subject itself to taxation in any such jurisdiction,
(C) to consent to general service of process in any such
jurisdictions, or (D) register or qualify such Registrable Securities
in more than ten states;
(v) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) notify each seller of any such Registrable Securities
covered by such Registration Statement (i) of the issuance by the SEC
or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (ii) of receipt of notification with
respect to the suspension of the qualification of the Registrable
Securities for offer or sale in any jurisdiction or the initiation of
any proceeding for such purpose, (iii) at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act,
of the Company's becoming aware that the Prospectus included in such
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in
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the light of the circumstances then existing (other than a fact
relating to such seller), and promptly use its best efforts to prepare
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 not misleading in the light of the
circumstances then existing;
(vii) otherwise use its best efforts to comply with federal and
state laws and all applicable rules and regulations of the SEC, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act;
(viii) use its best efforts (A) to cause all such Registrable
Securities covered by such Registration Statement to be listed on each
securities exchange on which similar securities issued by the Company
are then listed, if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (B) to secure
designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 under the Exchange Act or, failing
that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to such
Registrable Securities with the National Association of Securities
Dealers;
(ix) provide 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;
(x) in the case of an Underwritten Offering, enter into an
underwriting agreement in customary form and take such other actions
as Majority Holders shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(xi) in the case of an Underwritten Offering, use its best
efforts to 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 of the type customarily
covered by such opinions and "cold comfort" letters;
(xii) make available for inspection by any seller of such
Registrable Securities covered by such Registration Statement, by any
Underwriter participating in any disposition to be effected pursuant
to such Registration Statement and by any attorney, accountant or
other agent retained by any such
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<PAGE>
seller or any such Underwriter, 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; provided, however, that all such persons shall
agree to standard confidentiality provisions regarding all such
records, documents and information; and
(xiii) permit any holder of Registrable Securities which holder,
in the sole and exclusive judgment, exercised in good faith, of such
holder, might be deemed to be a controlling person of the Company, to
participate in the preparation of such registration or comparable
statement.
Each Qualified Holder shall be deemed to have agreed by including
Registrable Securities in a Registration Statement that upon receipt of any
notice from the Company of the happening of any event of the kind described
in Section 2.1(c)(vi) hereof, such Qualified Holder will forthwith
discontinue such Qualified Holder's disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Qualified Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.1(c)(vi) hereof 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
Qualified Holder's possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the Applicable Period shall be extended
by the number of days during the 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 Section 2.1(c)(vi) hereof.
If any Registration Statement, Prospectus or comparable statement
refers to any holder by name or otherwise as the holder of any securities
of the Company, then (whether or not, in the sole and exclusive judgment,
exercised in good faith, of such holder, such holder is or might be deemed
to be a controlling person of the Company) such holder shall have the right
to require (i) the insertion therein of language, in form and substance
reasonably satisfactory to such holder and presented to the Company in
writing, to the effect that the holding of such holder of such securities
is not to be construed as a recommendation by such holder of the investment
quality of the Company's securities covered thereby and that such holding
does not imply that such holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to
such holder by name or otherwise is not required by the Securities Act or
any similar federal or state statute then in force, the deletion of the
reference to such holder. Each seller shall provide to the Company in
writing information concerning itself required by law to be included in any
Registration Statement registering shares held by such seller.
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(d) Registration Expenses. The Company shall, whether or not any Shelf
---------------------
Registration or Piggy-back Registration shall become effective, pay all
expenses incident to its performance of or compliance with this Section in
connection with a Shelf Registration or Piggy-back Registration, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (subject to the limitation set
forth in Section 2.1(c)(iv) hereof), printing expenses, messenger and
delivery expenses, fees and disbursements of counsel for the Company and
all independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and other persons retained by the Company and
reasonable fees and disbursements of one counsel or firm of counsel chosen
by the Majority Holders, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (excluding
underwriting commissions and discounts). In all cases, any allocation of
Company personnel or other general overhead expenses of the Company or
other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business
shall be borne by the Company.
(e) Indemnification and Contribution. The Company hereby indemnifies,
--------------------------------
to the extent permitted by law, each Qualified Holder, its officers and
directors, if any, and each Person, if any, who controls such Qualified
Holder within the meaning of Section 15 of the Securities Act, against all
losses, claims, damages, liabilities (or proceedings in respect thereof)
and expenses (under the Securities Act or common law or otherwise), joint
or several, caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities (or proceedings in respect thereof) or
expenses are caused by any untrue statement or alleged untrue statement
contained in or by any omission or alleged omission from information
respecting such Qualified Holder furnished in writing to the Company by
such Qualified Holder expressly for use therein. If the offering pursuant
to any Registration Statement provided for under this Section is made
through Underwriters, the Company agrees to enter into an underwriting
agreement in customary form with such Underwriters and to indemnify such
Underwriters, their officers and directors, if any, and each Person, if
any, who controls such Underwriters within the meaning of Section 15 of the
Securities Act, against all losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses (under the Securities Act or
common law or otherwise), joint or several, caused by any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
(or proceedings in respect thereof) or expenses are caused by any untrue
statement or alleged untrue statement contained in or by any omission or
alleged omission
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<PAGE>
from information respecting such Underwriters or the participating
Qualified Holders furnished in writing to the Company by such Underwriters
or the participating Qualified Holders expressly for use therein. In
connection with any Registration Statement with respect to Registrable
Securities held by a Qualified Holder, each such Qualified Holder will
furnish to the Company in writing such information respecting such
Qualified Holder as shall be reasonably requested by the Company for use in
any such Registration Statement or Prospectus and will indemnify, to the
extent permitted by law, the Company, its officers and directors and each
Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, against any losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses resulting from any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the
Registration Statement or Prospectus or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement
is contained in or such omission is from information so furnished in
writing by such Qualified Holder expressly for use therein. If the
offering pursuant to any such Registration Statement is made through
Underwriters, each such Qualified Holder agrees to enter into an
underwriting agreement in customary form with such Underwriters, and to
indemnify such Underwriters, their officers and directors, if any, and each
Person, if any, who controls such Underwriters within the meaning of
Section 15 of the Securities Act to the same extent as hereinbefore
provided with respect to indemnification by such Qualified Holder of the
Company. Any Person entitled to indemnification under the provisions of
this Section 2.1(e) shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of
such claim, permit such indemnifying party to assume the defense of such
claim, with counsel reasonably satisfactory to the indemnified party; and
if such defense is so assumed, such indemnifying party shall not enter into
any settlement without the consent of the indemnified party if such
settlement attributes liability to the indemnified party and such
indemnifying party shall not be subject to any liability for any such
settlement made without its consent (which consent shall not be
unreasonably withheld); and any underwriting agreement entered into with
respect to any Registration Statement provided for under this Section shall
so provide. In the event an indemnifying party shall not be entitled, or
elects not, to assume the defense of a claim, such indemnifying party shall
not be obligated to pay the fees and expenses of more than one counsel or
firm of counsel for all parties indemnified by such indemnifying party in
respect of such claim, unless in the reasonable judgment of any such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties in respect to such claim.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating Qualified Holder, its
officers, directors or any Person, if any, who controls such Qualified
Holder as aforesaid, and shall survive the transfer of such securities by
such Qualified Holder.
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<PAGE>
If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(x) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on the other or (y) if the allocation provided by clause (x) above is
not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
but also the relative fault of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations.
Contributions required to be made by an Underwriter, if any, shall be
governed by the terms of the underwriting agreement. Notwithstanding the
foregoing, no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Certain Limitations on Registration Rights.
------------------------------------------
(i) In the case of an Underwritten Offering under a Shelf
Registration, if the Majority Holders determine to enter into an
underwriting agreement in connection therewith, or, in the case of a
Piggy-back Registration, if the Company or holders of securities
initially requesting or demanding such registration have determined to
enter into an underwriting agreement in connection therewith, all
Registrable Securities to be included in such registration shall be
subject to such underwriting agreement, and no Person may participate
in such registration unless such Person agrees to sell such Person's
securities on the basis provided in the underwriting arrangements
approved by the Company or such holders and completes and/or executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements and other reasonable documents which must be executed under
the terms of such underwriting arrangements.
(ii) Notwithstanding anything to the contrary in this Section
2.1, if the Company shall previously have received a request for
registration under this or any other registration rights agreement,
and if such previous registrations shall not have been withdrawn or
abandoned, the Company will not effect any registration of any of its
securities under the Securities Act (other than a registration on Form
S-4 or S-8 (or any similar form) or other publicly registered offering
pursuant to the Securities Act pertaining to the issuance of
securities under any benefit plan, employee compensation plan, or
employee or director stock purchase plan or in connection with an
offer of securities solely to existing security holders) whether or
not for sale for its own account, until a period of three months shall
have elapsed from the effective date of such previous
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<PAGE>
registration; and the Company shall so provide in any registration
rights agreements hereafter entered into with respect to any of its
securities.
(g) Allocation of Securities Included in Registration Statement. In
-----------------------------------------------------------
the case of an Underwritten Offering, if the Company's managing Underwriter
shall advise the Company and the Qualified Holders in writing that the
inclusion in any registration pursuant to this Section of some or all of
the Registrable Securities sought to be registered by the holders
requesting such registration creates a substantial risk that the proceeds
or price per unit the Sellers (as defined below) will derive from such
registration will be reduced or that the number of securities to be
registered (including those sought to be registered at the instance of the
Company and any other party entitled to participate in such registration as
well as those sought to be registered by the Qualified Holders) is too
large a number to be reasonably sold, then the number of Registrable
Securities sought to be registered by each Seller shall be reduced pro rata
in proportion to the number of securities sought to be registered by all
Sellers to the extent necessary to reduce the number of securities to be
registered to the number recommended by the managing underwriter.
For purposes of this Section 2.1(g) the term "Seller" shall mean and
include the Company and each holder of securities (including, but not
limited to, Registrable Securities) entitled to participate in the subject
registration.
(h) Limitations on Sale or Distribution of Other Securities. Each
-------------------------------------------------------
holder of Registrable Securities shall be deemed to have agreed by the
inclusion of Registrable Securities in a Registration Statement not to
effect any public sale or distribution, including (if requested by the
Underwriter) any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities, and to use such holder's best efforts not to effect
any public sale or distribution of any other equity security of the Company
or of any security convertible into or exchangeable or exercisable for any
equity security of the Company (other than as part of such underwritten
public offering) within 7 days before or 90 days (or such other period to
which the Underwriters of such offering may consent) after the effective
date of any Registration Statement filed by the Company pursuant to this
Article II or other agreement providing for registration rights.
2.2 Rule 144. 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)(l) of Rule 144 adopted by the SEC
under the Securities Act) and the rules and regulations adopted by the SEC
thereunder (or, if the Company is not required to file such reports, will, upon
the request of any Qualified Holder, make publicly available such information),
and will take such further action as any Qualified Holder may reasonably
request, all to the extent required from time to time to enable such Qualified
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
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<PAGE>
regulation hereafter adopted by the SEC. Upon the request of any Qualified
Holder, the Company will deliver to such Qualified Holder a written statement as
to whether it has complied with such requirements.
ARTICLE III
MISCELLANEOUS
3.1 Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of the
Majority Holders; provided, however, that no amendment, modification or
-------- -------
supplement or waiver or consent to the departure with respect to the provisions
of Sections 2.1(a) or 2.1(e) hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities.
3.2 Successors, Assigns and Transferees. This Agreement shall be
-----------------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective representatives, administrators, heirs, successors and assigns, as
applicable, including, without limitation and without the need for an express
assignment, subsequent Qualified Holders. If any successor, assignee or
transferee of any Qualified Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be entitled to receive the
benefits hereof and shall be conclusively deemed to have agreed to be bound by
all of the terms and provisions hereof.
3.3 Notices. All notices and other communications provided for
-------
hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
if to the Company, to:
Allin Communications Corporation
400 Greentree Commons
381 Mansfield Avenue
Pittsburgh, PA 15220
Attention: Richard W. Talarico
FAX: (412) 928-0225
if to a Qualified Holder, to:
the most recent address of such Qualified Holder on the books of
the Company
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<PAGE>
All such notices and communications shall be deemed to have been given or
made (i) when delivered by hand, (ii) two business days after being
deposited in the mail, postage prepaid, (iii) when telexed, answer-back
received or (iv) when telecopied, receipt acknowledged.
3.4 Descriptive Headings. The headings in this Agreement are for
--------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
3.5 Severability. In the event that any one or more of the
------------
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause, phrase or sentence in
every other respect and of the remaining provisions, paragraphs, words, clauses,
phrases or sentences hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
3.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
3.7 Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of Delaware, without
regard to the conflicts of laws rules thereof.
[signatures appear on next page]
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
ALLIN COMMUNICATIONS CORPORATION
By: /s/ Richard W. Talarico
---------------------------
Title: Chairman and Chief Executive Officer
------------------------------------
SUBSCRIBERS
/s/ Henry Posner, Jr.
-----------------------
/s/ Thomas D. Wright
----------------------
/s/ Richard W. Talarico
-------------------------
/s/ William C. Kavan
----------------------
/s/ James C. Roddey
---------------------
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