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EXHIBIT 4.9
eVENTURES GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 16th, 2000, by and between eVentures Group, Inc., a Delaware
corporation (the "Company"), and U.S. Telesource, Inc., a Delaware corporation
(the "Stockholder"), as holders of shares of common stock, par value $0.00002
per share, of the Company ("Common Stock").
WITNESSETH:
WHEREAS, the Company and the Stockholder have entered into that certain
Common Stock Subscription Agreement dated June 16th, 2000 (the "Subscription
Agreement"), pursuant to which the Stockholder acquired shares of Common Stock
(the "Shares"); and
WHEREAS, in connection with the Subscription Agreement, the parties have
agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and in the Subscription Agreement, the sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. REGISTRABLE SHARES. For purposes of this Agreement, "Registrable Shares"
shall mean, at any time, and with respect to the Stockholder or any Qualified
Transferee (as defined in Section 9(g) below), any Restricted Securities (as
defined below) held by the Stockholder or such Qualified Transferee, and
"Holder" shall mean the Stockholder or any Qualified Transferee holding
Registrable Shares. As to any particular Registrable Shares, once issued, such
Registrable Shares shall cease to be Registrable Shares (1) when such
Registrable Shares have been registered under the Securities Act of 1933, as
amended or any successor Federal statute (the "Act"), the Registration Statement
in connection therewith has been declared effective by the Securities and
Exchange Commission or any successor agency thereto (the "SEC") and they have
been disposed of pursuant to and in the manner described in such effective
Registration Statement, (2) when such Registrable Shares are sold or distributed
pursuant to Rule 144 (as defined below), (3) when such Registrable Shares have
ceased to be outstanding, or (4) when such Registrable Shares have been
transferred to a person or entity other than a Qualified Transferee. For
purposes of this Agreement, the term "Restricted Securities" shall mean, at any
time and with respect to the Stockholder or any Qualified Transferee, the Shares
and any Common Stock received on or with respect to any of the Shares, including
Common Stock received by way of stock split or stock dividend or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization, which are held by the Stockholder or such Qualified Transferee
and which theretofor have not been sold to the public pursuant to a Registration
Statement or transferred pursuant to Rule 144. For purposes of this Agreement,
the term "Registration Statement" shall mean any registration statement of the
Company which
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covers any of the Registrable Shares, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each case
including the Prospectus (as defined below) contained therein, all exhibits
thereto and all material incorporated by reference therein. For purposes of this
Agreement, the term "Prospectus" shall mean the prospectus included in a
Registration Statement, including any prospectus subject to completion, 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 Shares
and, in each case, by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein. For purposes of this Agreement, the term
"Rule 144" shall mean Rule 144 promulgated under the Act or any successor or
similar rule thereto, as may be enacted by the SEC from time to time.
2. FORM S-3 ELIGIBILITY. The Company hereby covenants and agrees that is
shall prepare and timely file all such filings in a timely manner and otherwise
as required by the Act, the Exchange Act and the rules and regulations
promulgated under the Act and the Exchange Act, from the date hereof and
throughout the term of this Agreement.
3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If the Company proposes to register any of its
securities under the Act (other than pursuant to (i) a registration solely
in connection with an employee benefit or stock ownership plan on Form S-8
or any comparable or successor form, (ii) a registration solely in
connection with an acquisition consummated in a manner which would permit
registration of such securities to the public on Form S-4 or any comparable
or successor form or (iii) a "shelf" or similar registration for use solely
in connection with future acquisitions), and the registration form to be
used may be used for the registration of Registrable Shares (a "Piggyback
Registration"), the Company will give prompt written notice to all Holders
of Registrable Shares of its intention to effect such a registration (each
a "Piggyback Notice"). Subject to Section 3(b) below, the Company will
include in such registration all Registrable Shares that Holders of
Registrable Shares request the Company to include in such registration by
written notice given to the Company within twenty (20) days after the date
of sending of the Piggyback Notice.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities by the
Company and the managing underwriter or underwriters for such offering
advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price
range acceptable to the Company, the Company will include in such
registration (i) first, the securities proposed to be sold by the Company,
(ii) second, the securities proposed to be sold by any other persons with
registration rights senior to those of the Holders, (iii) third, the
securities requested to be included in such registration, including (a)
Registrable Shares and (b) other securities held by persons with
registration rights equal to those of the Holders, pro rata among the
Holders of such Registrable Shares and such persons on the basis of the
number of shares owned by each such Holder and each such person,
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provided that any unused share allocation of any such Holder or such person
not fully participating shall be reallocated pro rata among the Holders of
Registrable Shares and such persons on the basis of the number of shares
being sold by each such Holder and each such person in such registration,
and (iv) fourth, other securities requested to be included in such
registration.
(c) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities held solely
by other shareholders of the Company's securities and the managing
underwriter or underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in
such offering within a price range acceptable to the persons (as defined
below) initially requesting such registration, the Company will include in
such registration (i) first, the securities requested to be included
therein by the persons requesting such registration, (ii) second, the
securities proposed to be sold by any other persons with registration
rights senior to those of the Holders, (iii) third, the Registrable Shares
requested to be included in such registration, pro rata among the Holders
of such Registrable Shares on the basis of the number of shares owned by
each such Holder, provided that any unused share allocation of any such
Holder not fully participating shall be reallocated pro rata among the
Holders of Registrable Shares on the basis of the number of shares being
sold by each such Holder in such registration, and (iv) fourth, other
securities requested to be included in such registration.
(d) OUTSTANDING REGISTRATION RIGHTS OBLIGATIONS. As the Company
understands the terms of the agreements under which it may be obligated to
register securities of the Company (the "Outstanding Agreements"), no
person or entity has rights under the Outstanding Agreements that would be
"senior" (as that term is used in Sections 3(c) and 3(d)) to those of the
Holders hereunder other than the persons and entities listed on Schedule I
to that certain Registration Rights Agreement, dated as of September 22,
1999, between the Company and such persons and entities (the "September
1999 Holders"). The Company has granted demand registration rights pursuant
to such Registration Rights Agreement and also pursuant to that certain
Registration Rights Agreement, dated as of March 10, 2000, between the
Company and the persons and entities listed on Schedule I thereto. The
September 1999 Holders further must approve any participation by other
persons or entities, including the Holders hereunder, in demand
registrations undertaken at their request.
4. REGISTRATION PROCEDURES. Whenever the Holders of Registrable Shares have
requested that any Registrable Shares be registered pursuant to this Agreement,
the Company will use its commercially reasonable efforts to effect the
registration and the sale of such Registrable Shares in accordance with the
intended method of distribution thereof and will as expeditiously as possible:
(i) prepare and file with the Commission a Registration Statement with
respect to such Registrable Shares on any appropriate form under the Act,
which form shall be selected by the Company and shall be available for the
sale of Registrable Shares in accordance with the intended method or
methods of distribution thereof and use its
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commercially reasonable efforts to cause such Registration Statement to
become effective, provided that before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel selected by the Holders of a majority of the
Registrable Shares included in such Registration Statement copies of all
such documents proposed to be filed, which documents will be subject to the
review of such counsel;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement and supplements to
the Prospectus used in connection therewith (and to file the Prospectus, as
so supplemented, under Rule 424 under the Act, if required) as may be
necessary to keep such Registration Statement effective for a period of up
to six (6) months, and comply with the provisions of the Act with respect
to the disposition of all securities included in such Registration
Statement during such period in accordance with the intended methods of
distribution by the selling Holders thereof set forth in such Registration
Statement or supplement to such Prospectus;
(iii) furnish to each selling Holder of Registrable Shares such number
of copies of such Registration Statement, each amendment and supplement
thereto (in each case including all exhibits), the Prospectus included in
such Registration Statement (including each preliminary Prospectus) and
such other documents as such selling Holder may reasonably request in order
to facilitate the disposition of the Registrable Shares owned by such
selling Holder, the Company consents to the use of the Prospectus and any
amendment or supplement thereto by a seller of Registrable Shares and the
underwriters, if any, in connection with the offering and sale of the
Registrable Shares covered by the Prospectus and any amendment or
supplement thereto;
(iv) notify the selling Holders of Registrable Shares and the managing
underwriter or underwriters, if any, promptly and (if requested by any such
Stockholder) confirm such advice in writing, (A) when a Prospectus,
including any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by the
Commission for amendments or supplements to a Registration Statement or
related Prospectus or for additional information, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of any of the Registrable Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, and (E) of the existence of any fact which results in a
Registration Statement, a Prospectus or any document incorporated therein
by reference containing an untrue statement of a material fact or omitting
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(v) use its commercially reasonable efforts to register or qualify
such Registrable Shares under such other securities or "blue sky" laws of
such jurisdictions as
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any selling Holder reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
selling Holder to consummate the disposition in such jurisdictions of the
Registrable Shares owned by such selling Holder, provided that the Company
will not be required (A) to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B) to subject itself to taxation in any such
jurisdiction, or (C) to consent to general service of process in any such
jurisdiction;
(vi) notify each selling Holder of such Registrable Shares, at any
time when a Prospectus relating thereto is required to be delivered under
the Act, of the happening of any event referred to in clause (iv)(E) of
this Section 4, and, at the request of any such seller, prepare a
supplement to such Prospectus or a post-effective amendment to such
Registration Statement and furnish to each seller of Registrable Shares a
reasonable number of copies of such supplement or amendment so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading;
(vii) use its commercially reasonable efforts to cause all such
Registrable Shares to be listed on each securities exchange on which
similar securities issued by the Company are then listed and to be
qualified for trading on each system on which similar securities issued by
the Company are from time to time qualified;
(viii) provide a transfer agent and registrar for all such Registrable
Shares not later than the effective date of such Registration Statement and
thereafter maintain such transfer agent and registrar;
(ix) cooperate with each seller of Registrable Shares and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Shares to be sold pursuant to the
Registration Statement, which certificates, if so required by any
securities exchange upon which any Registrable Shares are listed, shall be
penned, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders, and in such denominations and
registered in such names as each seller of Registrable Shares or the
managing underwriters, if any, may request at least two Business Days prior
to the sale of Registrable Shares pursuant to the Registration Statement;
(x) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
Holders of a majority of the Registrable Shares being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Shares, including using its best
efforts to cause its officers to participate in "road shows" and other
information meetings organized by the managing underwriter and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration: (A) make
such representations and warranties to each seller of Registrable Shares,
and the underwriters, if any, in form, substance and scope as are
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customarily made by issuers to underwriters in underwritten offerings; and
(B) the Company shall deliver such documents and certificates as may be
reasonably requested by each seller of Registrable Shares, and the managing
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant hereto and to evidence
compliance with any conditions contained in the underwriting agreement or
other agreement entered into by the Company;
(xi) in connection with an underwritten offering, use its commercially
reasonable efforts to (A) obtain opinions of counsel to the Company and
updates thereof, which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, addressed to
the underwriters, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such underwriters; and (B) obtain "cold comfort"
letters and updates thereof from the Company's independent certified public
accountants, addressed to the underwriters, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with underwritten offerings; make
available for inspection during normal business hours by any underwriter
participating in any disposition pursuant to a registration statement, and
any attorney or accountant retained by such underwriter, all financial and
other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by such underwriter, attorney or
accountant in connection with such registration statement; provided that
such underwriters execute prior thereto an agreement with the Company that
all such records, information or documents shall be kept confidential by
such persons unless (1) disclosure of such records, information or
documents is required by law or by a court or administrative order or (2)
such records, information or documents are or become (but only when they
become) generally available to the public other than as a result of
disclosure in violation of this paragraph; and make available for
inspection by any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;
(xii) otherwise use its commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission and make available
to its security holders, as soon as reasonably practicable but no later
than fifteen (15) months after the effective date of the Registration
Statement, an earnings statement covering a period of twelve (12) months
beginning after the effective date of the Registration Statement, in a
manner which satisfies the provisions of Section 11(a) of the Act and Rule
158 thereunder;
(xiii) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Registrable Shares included in such
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registration statement for sale in any jurisdiction, the Company will use
its commercially reasonable efforts promptly to obtain the withdrawal of
such order;
(xiv) provide a CUSIP number for all Registrable Shares, not later
than the effective date of the applicable registration statement;
(xv) cooperate with each seller of Registrable Shares and each
underwriter participating in the disposition of such Registrable Shares and
their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.; and
(xvi) take all other steps reasonably necessary to effect the
registration of the Registrable Shares contemplated hereby.
Notwithstanding anything set forth herein, the Company shall be entitled to
withdraw a Registration Statement in its sole and exclusive discretion at any
time prior to its becoming effective.
5. REGISTRATION EXPENSES.
(a) DEFINITION. The term "Registration Expenses" means any expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, listing
fees, fees and expenses of compliance with securities or "blue sky" laws,
printing expenses, messenger and delivery expenses, internal expenses, the
fees and expenses of counsel for the Company (but not the fees and expenses
of counsel to the Holders of the Registrable Shares included in such
registration) and all independent certified public accountants,
underwriting fees and expenses (excluding discounts and commissions
attributable to the Registrable Shares, which shall be paid by the selling
Holders out of the proceeds of the offering) and the fees and expenses of
any other persons (as defined below) retained by the Company. For purposes
of this Agreement, the term "person" shall be construed as broadly as
possible and shall include an individual or natural person, a partnership
(including a limited liability partnership), a company, an association, a
joint stock company, a limited liability company, a trust, a joint venture,
an unincorporated entity and a governmental authority.
(b) PAYMENT. The Company shall pay the Registration Expenses in
connection with any and all Piggyback Registrations.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
to the extent permitted by law, each Holder of Registrable Shares, such
Holder's general and limited partners, officers and directors and each
person who controls such Holder (within the meaning of the Act) against all
losses, claims, damages, liabilities and expenses caused by (i) any untrue
or alleged untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to
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be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such Holder expressly
for use therein or (ii) any violation or alleged violation by the Company
of the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state
securities law. In connection with an underwritten offering, the Company
will indemnify such underwriters, their officers and directors and each
person who controls such underwriters (within the meaning of the Act) to
the same extent as provided above with respect to the indemnification of
the Holders of Registrable Shares.
(b) INDEMNIFICATION BY HOLDERS. In connection with any Registration
Statement in which a Holder of Registrable Shares is participating, each
such Holder will furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with
any such Registration Statement or Prospectus and, to the extent permitted
by law, will indemnify the Company, its directors and officers and each
person who controls the Company (within the meaning of the Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or
omission is contained in any written information or affidavit so furnished
in writing by such Holder; provided, that the obligation to indemnify will
be individual to each Holder and will be limited to the net amount of
proceeds received by such Holder from the sale of Registrable Shares
pursuant to such registration statement.
(c) NOTICE; DEFENSE OF CLAIMS. Any person entitled to indemnification
hereunder will (i) give prompt written notice to the indemnifying party of
any claim with respect to which it seeks indemnification; provided, that
the failure to so notify the indemnifying party shall not relieve the
indemnifying party of any liability that it may have to the indemnified
party hereunder (except to the extent that the indemnifying party is
materially prejudiced by reason of such failure) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld or delayed). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a
claim will not be obligated to pay the fees and expenses of more than one
special and one local counsel for all parties indemnified by such
indemnifying party with respect to such claim.
(d) CONTRIBUTION. If the indemnification provided for in this Section
5 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
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amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party on the other from the
offering of the Registrable Shares or (ii) if the allocation provided for
by the foregoing clause (i) is not permitted by applicable law, not only
such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other
hand in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities
(or actions in respect thereof). The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The
obligation to contribute will be individual to each Holder of Registrable
Shares and will be limited to the amount by which the net amount of
proceeds received by such Holder from the sale of Registrable Shares
exceeds the amount of losses, liabilities, damages, and expenses which such
Holder has otherwise been required to pay by reason of such statements or
omissions.
(e) SURVIVAL. The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or
controlling person of such indemnified party and will survive the transfer
of securities.
(f) UNDERWRITING AGREEMENT. To the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with an underwritten public offering are in
conflict with the provisions of this Section 6, and the Holder indemnifying
or seeking indemnification is a party thereto, the provisions contained in
the underwriting agreement shall control.
(g) NON-EXCLUSIVITY. The obligations of the Company under this Section
6 shall be in addition to any liability which the Company may otherwise
have to any indemnified person under this Section 6 and shall be in
addition to any liability which such indemnified person may otherwise have
to the Company. The remedies provided in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available
to any indemnified party at law or in equity.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No person may participate
in any registration hereunder which is underwritten unless such person (i)
agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements, (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
Holder of Registrable Shares included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters other than representations and
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warranties regarding such Holder, such Holder's title to its Registrable Shares
and such Holder's intended method of distribution, and (iii) if requested by the
managing underwriter or underwriters or the Demanding Persons (as defined in the
Registration Rights Agreement, dated as of September 22, 1999, among the Company
and the persons and entities set forth on Schedule 1 thereto), agrees not to
sell Registrable Shares or other securities held by such Holder in any
transaction other than pursuant to such underwriting for such period following
the effective date of the registration statement relating to such underwriting
for such period as is determined by either the Board of Directors or the
Demanding Persons.
8. STOCKHOLDER LOCK-UP; AGREEMENT NOT TO SELL.
(a) LOCK-UP AND AGREEMENT NOT TO SELL. Prior to the first annual
anniversary of the date hereof, no Holder of Registrable Shares may make
any public sale of Registrable Shares (pursuant to a Registration
Statement, Rule 144 or otherwise), subject to the following exceptions;
provided, however, that (i) all officers, directors and holders of one
percent (1%) or more of the diluted equity of the Company (other than (a)
those individuals granted stock options by the Company pursuant to the 1999
Omnibus Securities Plan and (b) those individuals to be granted stock
options by the Company as set forth on the Schedule of Exceptions to the
Subscription Agreement) and all holders of registration rights under other
agreements with the Company have entered into similar agreements and (ii)
any discretionary waiver or termination of the restrictions of any such
agreement (including this Agreement) with respect to 0.25% or more (in the
aggregate) of the Company's equity securities by the Company, or the
managing underwriter, shall apply to all persons subject to such agreements
on a pro rata basis.
(b) EXCEPTIONS. Nothing herein or in the Subscription Agreement shall
prevent a Holder:
(i) (A) that is a partnership or corporation from making a
distribution of Registrable Shares to the partners or shareholders
thereof that are otherwise in compliance with applicable securities
laws, so long as such permitted distributees agree to be bound by the
terms and conditions of this Section 8; (B) that desires to sell any
Registrable Shares in a private transaction in compliance with
applicable securities laws from consummating such a sale so long as
the purchaser in any private sale agrees in writing to be bound by the
restrictions set forth in this Section 8; or (C) that is an
individual, from making a transfer of Registrable Shares by gift, will
or the laws of descent and distribution, subject to the restrictions
set forth in this Section 8; or
(ii) from including Registrable Shares in a Piggyback
Registration under the terms and conditions set forth in Section 3
above.
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9. MISCELLANEOUS.
(a) INFORMATION AND REPORTING.
(i) The Company shall, at all times during which it is neither
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b)
under the Exchange Act, upon the written request of any Stockholder,
provide in writing to such Stockholder and to any prospective
transferee of the Registrable Shares of such Stockholder the
information concerning the Company described in Rule 144A(d)(4) or any
successor rule under the Act ("Rule 144A Information"). The Company's
obligations under this Section 9(a)(i) shall at all times be
contingent upon receipt from the prospective transferee of Registrable
Shares of a written agreement to take all reasonable precautions to
safeguard the Rule 144A Information from disclosure to anyone other
than persons who will assist such transferee in evaluating the
purchase of any Registrable Shares.
(ii) The Company shall timely file such information, documents
and reports as the Commission may require or prescribe under Section
13 of the Exchange Act. The Company shall timely file such
information, documents and reports which a corporation, partnership or
other entity subject to Section 13 or 15(d) (whichever is applicable)
of the Exchange Act is required to file. The Company shall promptly
upon request furnish any Holder of Registrable Shares (a) a written
statement by the Company that it has complied with the reporting
requirements of Section 13 or 15(d) of the Exchange Act, (b) a copy of
the most recent annual or quarterly report of the Company, and (c)
such other reports and documents filed by the Company with the
Commission as such Holder may reasonably request in availing itself of
an exemption for the sale of Registrable Shares without registration
under the Act. The Company acknowledges and agrees that the purposes
of the requirements contained in this Section 9(a)(ii) are to enable
any such Holder to comply with the current public information
requirement contained in paragraph (c) of Rule 144, should such Holder
ever wish to dispose of any of the securities of the Company acquired
by it without registration under the Act in reliance upon Rule 144 (or
any other similar exemptive provision), and to qualify the Company for
the use of registration statements on Form S-3. In addition, the
Company shall take such other measures and file such other
information, documents and reports, as shall hereafter be required by
the Commission as a condition to the availability of Rule 144 (or any
similar exemptive provision hereafter in effect) and the use of Form
S-3. The Company also covenants to use its commercially reasonable
efforts, to the extent that it is reasonably within its power to do
so, to qualify for the use of Form S-3.
(b) NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the Holders of Registrable Shares in
this Agreement, provided, however, that other purchasers of Shares from the
Company may become Holders and parties to this Agreement by executing and
delivering to the Company a signature page to this Agreement.
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<PAGE> 12
(c) ADJUSTMENTS AFFECTING REGISTRABLE SHARES. The Company will not
take any action, or permit any change to occur, with respect to its
securities for the purpose of materially and adversely affecting the
ability of the Holders of Registrable Shares to include such Registrable
Shares in a registration undertaken pursuant to this Agreement or
materially and adversely affecting the marketability of such Registrable
Shares in any such registration (including, without limitation, effecting a
stock split or a combination of shares); provided that this Section 9(c)
shall not apply to actions or changes with respect to the Company's
business, balance sheet, earnings or revenue where the effect of such
actions or changes on marketability of the Registrable Shares is not
material.
(d) NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed effectively
given when delivered personally or by facsimile transmission or by
overnight delivery service or 72 hours after being mailed by first class
certified or registered mail, return receipt requested, postage prepaid:
(i) If to the Company, eVentures Group, Inc., 300 Crescent Court,
Suite 800, Dallas, Texas 75201, Attention: Stuart Chasanoff (Fax:
214-777-4107), or at such other address or addresses as may have been
furnished in writing by the Company to the Stockholder with a copy to
(which shall not constitute notice): White & Case LLP, 1155 Avenue of
the Americas, New York, NY 10036, Attention: Kevin Keogh, Esq. (Fax:
212-354-8113).
(ii) If to the Stockholder, U.S. Telesource, Inc., 555
Seventeenth Street, Denver, Colorado 80202, Attention: Executive Vice
President & General Counsel (Fax: 303-992-1724), or at such other
address or addresses as may have been furnished in writing by the
Stockholder to the Company.
(e) REMEDIES. Any person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
(f) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, no
amendment, modification, termination or cancellation of this Agreement
shall be effective unless made in writing signed by the Company and the
Holders of a majority of the shares of Registrable Shares; provided that no
amendment may be made to Sections 8 that adversely affects the rights of
the Holders or to this Section 9(f) unless agreed upon by the Company and
the Holders of all the Registrable Shares, and that provided that that no
amendment that materially and adversely affects the rights of any Holder
shall be made without the consent of such Holder.
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<PAGE> 13
(g) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Shares pursuant to this Agreement may be assigned
(but only with all related obligations) by the Stockholder to any
transferee (a "Qualified Transferee") that is an Affiliate (as defined
below) or, if not an Affiliate, acquires from the Stockholder either (i)
100,000 or more Registrable Shares or (ii) if less than 100,000 Registrable
Shares are owned by the Stockholder at the time of a transfer, all of the
Registrable Shares owned by the Stockholder, in either case in connection
with the permitted transfer of Registrable Shares. Such assignment shall
not affect the rights of Holders hereunder which shall remain in full force
in accordance with the terms hereof. The Stockholder shall provide the
Company with prior written notice of such transfer(s)/assignment(s);
provided, however, that the failure to provide such notice shall not be
deemed to preclude assignment hereunder. As used herein, "Affiliate" shall
mean a person or entity that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control
with, the Stockholder.
(h) SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(i) ENTIRE AGREEMENT. This Agreement embodies the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements relating to such subject matter.
(j) HEADINGS. The headings of this Agreement are for convenience only
and do not constitute a part of this Agreement.
(k) GOVERNING LAW. The construction, validity and interpretation of
this Agreement will be governed by the internal 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.
(l) FURTHER ASSURANCES. Each party to this Agreement hereby covenants
and agrees, without the necessity of any further consideration, to execute
and deliver any and all such further documents and take any and all such
other actions as may be necessary or appropriate to carry out the intent
and purposes of this Agreement and to consummate the transactions
contemplated hereby.
(m) COUNTERPARTS. This Agreement may be executed by facsimile and in
one or more counterparts, each of which shall be deemed to be an original,
but all of which shall be one and the same document.
* * *
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<PAGE> 14
IN WITNESS WHEREOF, this Registration Rights Agreement has been executed by
the parties hereto as of the date first written above.
eVENTURES GROUP, INC.
By: /s/ Barrett N. Wissman
-------------------------
Name: Barrett N. Wissman
Title: President
U.S. TELESOURCE, INC.
By: /s/ Marc B. Weisberg
-------------------------
Name: Marc B. Weisberg
Title: President
[REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
