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EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is dated as of
________________ __, 200__, by and between SONUS COMMUNICATION HOLDINGS, INC.,
a Delaware corporation (the "COMPANY"), the Principal Stockholders (within the
meaning of the Merger Agreement defined below), and the stockholders of Empire
One Telecommunications, Inc., a New York corporation, who agree to be bound by
this Agreement listed on Schedule A attached hereto and incorporated by
reference herein (each a "STOCKHOLDER" and collectively, the "STOCKHOLDERS").
WHEREAS, pursuant to the terms of that certain Merger Agreement of even
date herewith by and between the Company, EOT Acquisition Corporation, a
Delaware corporation ("Acquisition"), Empire One Telecommunications, Inc., a
New York corporation ("Empire One"), the Stockholder and certain other
stockholders of Empire One (the "MERGER AGREEMENT"), the Stockholder will
receive, pursuant to the conditions of the Merger Agreement, _________ shares
of the Company's Common Stock, par value $.0001 per share (the "COMMON STOCK")
upon the consummation of the merger of Empire One into Acquisition (the
"Merger"); and
WHEREAS, in order to induce the Stockholder to enter into the Merger
Agreement and/or vote for the Merger contemplated thereby, the Company desires
to grant registration rights to the Stockholder for the shares of Common Stock
to be received in the Merger in accordance with the terms and conditions
hereof;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS. As used herein the following defined terms shall have
the following respective meanings:
(a) "CAPITAL STOCK" means the Company's Common Stock and any
other class of common stock created by the Company in the future.
(b) "COMMON STOCK" has the meaning set forth in the Recitals.
(c) "HOLDERS" means any person or entity to whom shares of
Capital Stock were issued pursuant to the Merger Agreement and which
agrees to be bound by this Agreement.
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(d) "INDEMNIFIED PARTY" has the meaning set forth in
subparagraph.
(e) "INDEMNIFYING PARTY" has the meaning set forth in
subparagraph.
(f) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act.
(g) "REGISTRABLE SECURITIES" means all shares of Capital Stock
of the Company issued pursuant to the Merger Agreement.
(h) "SEC" means the Securities and Exchange Commission.
(i) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
2. RESERVED.
3. COMPANY REGISTRATION.
(a) If the Company, at any time after the completion of the next
registration of Capital Stock under the Securities Act to occur
following the date hereof, shall determine to register any of its
securities, either for its own account or the account of a security
holder or holders, in a registration statement covering the sale of
Capital Stock to the general public pursuant to an underwritten public
offering (except with respect to any registration filed on Form S-8,
Form S-4 or any successor forms thereto), the Company will: (i) give to
each Holder written notice thereof at least 45 days before filing;
provided, however, in the case of a Registration Statement on Form S-3,
the Company shall be required to give each Holder written notice of the
proposed filing thereof promptly after a decision to make such filing
has been made and in no event less than ten business days prior to
filing; and (ii) use its best efforts to include in such registration
(and any related qualification under blue sky laws) and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 15 days after receipt of
such written notice from the Company, or, in the case of a Registration
Statement on Form S-3, within seven business days after receipt of such
written notice, by any Holder or Holders, except as set forth in
subparagraph 3(b) below. The notice referred to in this subparagraph
shall include a list of the jurisdictions in which the Company intends
to attempt to qualify such securities under the applicable blue sky or
other state securities laws.
(b) The right of any Holder to registration pursuant to this
Paragraph 3 shall be conditioned upon such Holder's participation in
the underwriting to the extent provided herein. All Holders proposing
to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company, and may, at their option, require that any
or all the representations and warranties by, and the covenants and
other agreements on the part of, the Company to and for the benefit of
such underwriter shall also be made to and for the benefit of such
Holders. Such Holders shall not be required to make any representations
or warranties to or agreements with the Company or the underwriter
other than those relating to such Holders, their Registrable Securities
and their intended methods of distribution and information about such
Holders provided by such
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Holders for use in the registration statement. Upon the written request
of the managing underwriter of any underwritten offering of the
Company's securities, a Holder of Registrable Securities shall not
sell, make any short sale of, loan, grant any option for the purchase
of, or otherwise dispose of any Registrable Securities (other than
those included in such registration) without the prior written consent
of such managing underwriter for a period (not to exceed 30 days before
the effective date and 75 days thereafter) that such managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering. Notwithstanding any other provision of
this Paragraph 3, if the underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the
Company shall so advise all Holders of Registrable Securities which
would otherwise be registered and underwritten pursuant hereto, and the
Company shall include in such registration first the number of shares
requested to be sold by the Company together with the number of shares
requested to be sold by the persons and entities exercising demand
registration rights with respect to such registration, if any, then the
number of shares of Registrable Securities requested to be included in
the registration which, in the opinion of such underwriter, can be
sold, pro rata among all Holders thereof and all other shareholders of
the Company that have contractual rights with respect to the
registration of shares of Capital Stock held by such shareholders (the
"Other Holders") in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and
Other Holders at the time of filing the registration statement, with
further proportional allocations among the Holders and Other Holders if
any such Holder or Other Holder has requested less than all such
Registrable Securities it is entitled to register.
4. EXPENSES OF REGISTRATION. All expenses incurred in connection with
any registration or qualification pursuant to this Agreement,
including, without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of
counsel for the Company, and expenses and fees of any special audits
incidental to or required by such registration, shall be borne by the
Company; provided, however, that the Company shall not be required to
pay fees of legal counsel of the Holders, or underwriters' discounts or
commissions relating to Registrable Securities (such underwriters'
fees, discounts or commissions to be borne by the Holders, on a pro
rata basis, based on the number of shares of Registrable Securities
sold by each of them).
5. REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep each
Holder participating therein advised in writing as to the initiation of
such registration (and any state qualifications) and as to the
completion thereof. The Company may decline to file a Registration
Statement after giving notice to each Holder, or withdraw any
registration after filing and after such notice, but prior to the
effectiveness thereof, provided that the Company shall promptly notify
each Holder in writing of any such action and provided further that the
Company shall bear all expenses incurred by such Holder or otherwise in
connection with such withdrawn registration. Upon receipt of written
notice from the Company that a registration statement or prospectus
contains a Misstatement (as defined below), each Holder of Registrable
Securities shall forthwith discontinue disposition of Registrable
Securities until such Holder has received copies of the supplemented or
amended prospectus, or until such Holder is advised in writing by the
Company that the use of the prospectus may be resumed, and, if so
directed by the Company, such
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Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable
Securities, each of the Holder's officers, directors, partners and
employees, and each person controlling such Holder, with respect to
such registration or qualification effected pursuant to this Agreement
and in which Registrable Securities of the Holders are included,
against all claims, losses, damages, and liabilities (or actions in
respect thereto) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus, registration statement or other document incident to any
such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated pursuant to any Federal, state or common law rule or
regulation including, without limitation, the Securities Act,
applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification
or compliance and will reimburse each such Holder, each of the Holder's
officers, directors, partners and employees, and each person
controlling such Holder, for any legal and any other reasonable
expenses incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, including reasonable
attorneys' fees and expenses; provided, however, that the Company will
not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement
or omission based upon and in conformity with written information
furnished to the Company by such Holder. Such indemnity shall be
effective notwithstanding any investigation made by or on behalf of any
Holder or any such officer, director, partner, employee, or controlling
person and shall survive any transfer by the same of the Registrable
Securities. The foregoing notwithstanding, the Company shall not be
liable to the extent that any such claim, loss, damage or liability
arises out of or is based upon an untrue statement of a material fact
or an omission to state a material fact required to be stated in a
registration statement or prospectus or necessary to make the
statements in a registration statement, prospectus or preliminary
prospectus not misleading (a "Misstatement") or alleged Misstatement
made in any preliminary prospectus if (i) such Holder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities giving rise
to such claim, loss, damage or liability and (ii) the prospectus would
have corrected such Misstatement. In addition, the Company shall not be
liable to the extent that any such claim, loss, damage or liability
arises out of or is based upon a Misstatement or alleged Misstatement
in a prospectus, (i) if such Misstatement or alleged Misstatement is
corrected in an amendment or supplement to such prospectus and (ii)
having previously been furnished by or on behalf of the Company with
copies of the prospectus as so amended or supplemented, such Holder
thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale to the person who
purchased a Registrable Security from such Holder and who is asserting
such claim, loss, damage or liability.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
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registration or qualification is being effected, indemnify the Company,
each of its directors, officers and employees, each person who controls
the Company, and each other such Holder, each of such other Holder's
officers, directors, partners and employees, and each person
controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereto) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus or other
document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such
Holders, such directors, officers, partners, employees or persons for
any legal or any other reasonable expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, including reasonable attorneys' fees and expenses, in each case
to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in
such registration statement, prospectus or other document in reliance
upon and in conformity with written information furnished to the
Company by such Holder. Notwithstanding the foregoing, the liability of
any such Holder shall not exceed an amount equal to the proceeds
realized by each such Holder of Registrable Securities sold as
contemplated herein. Such indemnity shall be effective notwithstanding
any investigation made by or on behalf of the Company, any such
director, officer, partner, employee, or controlling person and shall
survive the transfer of such securities by such Holder.
(c) Each party entitled to indemnification under this Paragraph
6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought. Unless in the reasonable judgment of the
Indemnified Party a conflict of interest may exist between the
Indemnifying Party and the Indemnified Party, the Indemnifying Party
shall be permitted to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that in any event
counsel for the Indemnifying Party or Indemnified Party who shall
conduct the defense of such claim or litigation as provided above shall
be approved by the other Party (which approval shall not be
unreasonably withheld), and such other Party may participate in such
defense at such Party's expense; provided, further, that the failure of
any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Paragraph
6 unless such failure shall have had a material adverse effect on the
Indemnifying Party's ability to defend such claim.
(d) The Indemnified Party shall make no settlement of any claim
or litigation which would give rise to liability on the part of the
Indemnifying Party under any indemnity contained in this Paragraph 6
without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed, and no Indemnifying
Party shall make any settlement of any such claim or litigation without
the consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed. If a firm offer is made to settle a
claim or litigation defended by the Indemnified Party and the
Indemnified Party notifies the Indemnifying Party in writing that the
Indemnified Party desires to accept and agree to such offer, but the
Indemnifying Party elects not to accept or agree to such offer within
ten days after receipt of written notice from the Indemnified Party of
the terms of such offer, then, in such event, the Indemnified Party
shall continue to contest or defend such claim or litigation and, if
such claim or litigation is within the scope of the
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Indemnifying Party's indemnity contained in this Paragraph 6, the
Indemnified Party shall be indemnified pursuant to the terms hereof. If
a firm offer is made to settle a claim or litigation defended by the
Indemnifying Party and the Indemnifying Party notifies the Indemnified
Party in writing that the Indemnifying Party desires to accept and
agree to such offer, but the Indemnified Party elects not to accept or
agree to such offer within ten days after receipt of written notice
from the Indemnifying Party of the terms of such offer, then, in such
event, the Indemnified Party may continue to contest or defend such
claim or litigation and, in such event, the total maximum liability of
the Indemnifying Party to indemnify or otherwise reimburse the
Indemnified Party in accordance with this Agreement with respect to
such claim or litigation shall be limited to and shall not exceed the
amount of such settlement offer, plus reasonable out-of-pocket costs
and expenses (including reasonable fees and disbursements of counsel)
to the date of notice that the Indemnifying Party desired to accept
such settlement offer.
(e) The indemnification payments required pursuant to this
Paragraph 6 for expenses of the investigation or defense of a claim or
lawsuit shall be made from time to time during the course of the
investigation or defense, as the case may be, upon submission of
reasonably sufficient documentation that any such expenses have been
incurred.
7. INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company
such written information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may
reasonably request in writing and as shall be required in connection
with any registration or qualification referred to in this Agreement.
The Company agrees to include in any such registration statement all
information concerning the Holders and their distribution which the
Holders shall reasonably request.
8. CHANGES; WAIVER; ASSIGNMENT. The terms and provisions of this
Agreement may not be modified, amended or assigned, except that they
may be modified, amended or assigned with the written consent of (i)
the Company and (ii) the Holders of a majority of the Registrable
Securities outstanding. None of the terms and provisions of this
Agreement may be waived except in writing by the person so waiving.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Delaware.
10. NOTICE. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile
transmission or mailed by prepaid first class certified mail, return
receipt requested, or delivered by a nationally recognized overnight
courier service prepaid, to the parties at the following addresses or
facsimile numbers: If to the Company, to:
Sonus Communication Holdings, Inc.
1600 Wilson Boulevard, Suite 1008
Arlington, Virginia 22209
Attention: Rick D. Rose
Telecopier: 703-527-8865
with a copy to:
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Cecil E. Martin, III, Esquire
McGuire, Woods, Battle & Boothe LLP
7 St. Paul Street, Suite 1000
Baltimore, Maryland 21202
Telecopier: 410-659-4535
If to the Holders, to the address listed as the most recent address of
such Holders on the books and records of Empire One Telecommunications,
Inc.
with a copy to:
David E. Bronston, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
250 Park Avenue
New York, New York 10177
Telecopier: 212-986-0604
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section, be
deemed given upon delivery, (ii) if delivered by facsimile transmission
to the facsimile number as provided for in this Section, be deemed
given upon receipt, (iii) if delivered by mail in the manner described
above to the address as provided in this Section, be deemed given on
the earlier of the fourth Business Day following mailing or upon
receipt and (iv) if delivered by overnight courier to the address as
provided for in this Section, be deemed given on the earlier of the
first Business Day following the date sent by such overnight courier or
upon receipt (in each case regardless of whether such notice, request
or other communication is received by any other Person to whom a copy
of such notice is to be delivered pursuant to this Section). Any party
from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.
11. TERMINATION. This Agreement shall terminate with respect to any
Holder on the date on which the Holder may sell all of such Holder's
Registrable Securities pursuant to Rule 144 under the Securities Act
within any 90 day period or, with respect to any such Holder, on the
date on which all of such Holder's Registrable Securities have been
registered pursuant to a registration statement filed with the
Commission and which has become effective.
12. Arbitration.
(a) Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association by an arbitration panel consisting of three
persons, one selected by Sonus, one selected by the Principal
Stockholders and the third selected by mutual agreement of the first
two arbitrators selected, and judgement upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
(b) The arbitration shall be held in Washington, D.C. if brought
by Target or any of the Principal Stockholders and in New York City if
brought by Acquisition or Sonus.
(c) All fees, costs and expenses (including reasonable
attorneys' fees and expenses) incurred by a party that prevails on any
issue in any arbitration commenced hereunder or in any judicial
proceeding seeking to enforce this Agreement to arbitrate disputes or
seeking to enforce any order or award of any arbitration hereunder
shall be assessed against the party or parties that do not prevail on
such issue or issues.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and which together shall
constitute a single agreement. This Agreement may be delivered by
facsimile.
15. HEADINGS. The headings of the Paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute a
part hereof.
16. SEVERABILITY. If any provision or any portion of any provision of
this Agreement shall be held to be void or unenforceable, the remaining
portions of this Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their authorized officers as of the day and year first above
written.
SONUS COMMUNICATION HOLDINGS, INC.
By: /s/ W. Todd Coffin
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Name: W. Todd Coffin
Title: CEO
[NAME OF HOLDER]
By:
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Name:
Title:
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