<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
INTERNET COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
---------------------------------------
(Title of Class of Securities)
46057T408
---------
(CUSIP Number)
Craig D. Slater Drake S. Tempest, Esq.
The Anschutz Corporation O'Melveny & Myers LLP
2400 Anaconda Tower The Citicorp Center
555 Seventeenth Street 153 East 53rd Street, 54th Floor
Denver, Colorado 80202 New York, New York 10022-4611
(303) 298-1000 (212) 326-2000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 19, 1996
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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 Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the statement /X/.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
- --------------------
The remainder of this cover page shall be filled out for a
reporting person's initiial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("ACT") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, SEE the NOTES).
CUSIP Number 46057T408
---------
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Interwest Group, Inc.
84-0810486
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORT- 2,306,541
ING PERSON ------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,306,541
------------------------------------------------
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,306,541
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.96%
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14 TYPE OF REPORTING PERSON
CO
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2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Anschutz Company
84-1179412
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORT- 2,306,541
ING PERSON ------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,306,541
------------------------------------------------
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,306,541
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.96%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
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3
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Philip F. Anschutz
###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORT- 2,306,541
ING PERSON ------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,306,541
------------------------------------------------
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,306,541
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.96%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
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4
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ITEM 1. SECURITY AND THE ISSUER
The title of the class of equity securities to which this statement
relates is:
Common Stock, no par value ("COMMON STOCK"), of Internet
Communications Corporation, a Colorado corporation (the "COMPANY")
The name of the issuer and address of its principal executive
offices are:
Internet Communications Corporation
7100 East Belleview Avenue
Suite 201
Englewood, Colorado 80111
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed on behalf of Interwest Group, Inc., a
Colorado corporation ("GROUP"), Anschutz Company, a Colorado Company ("AC"),
and Philip F. Anschutz ("ANSCHUTZ"). Anschutz owns 100% of the outstanding
common stock of AC, and AC owns 100% of the outstanding common stock of Group,
and thus Anschutz may be deemed to control Group and AC.
The name, residence or business address and present principal
occupation or employment, and the name, principal business and address of any
corporation or other organization in which such employment is conducted, of
Group, AC, Anschutz and each executive officer and director of Group or AC, as
the case may be, are set forth below. Unless otherwise noted, each individual
listed below is a citizen of the United States of America.
Present Principal Occupation or
Employment, principal Business Business or
Filing Person and Address Residence Address
- ------------- ------------------------------- -----------------
Group 12201 East Arapahoe Road
Suite C10
Englewood, CO 80112
(303) 792-2535
AC 2400 Anaconda Tower
555 Seventeenth Street
Denver, CO 80202
(303) 298-1000
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Present Principal Occupation or
Employment, principal Business Business or
Filing Person and Address Residence Address
- ------------- ------------------------------- -----------------
Anschutz President and Director of The 2400 Anaconda Tower
Anschutz Corporation; President 555 Seventeenth Street
and Director of AC; President, Denver, CO 80202
Chairman of the Board and (303) 298-1000
Chief Executive Officer of Rio
Grande Industries, Inc.; and
Chairman of the Board of Southern
Pacific Rail Corporation
M.A. Williams Director and Vice President of AC 2400 Anaconda Tower
555 Seventeenth
Street
Denver, CO 80202
(303) 298-1000
D.L. Polson Director, Vice President and 2400 Anaconda Tower
Assistant Secretary of AC; and 555 Seventeenth Street
director of Group Denver, CO 80202
(303) 298-1000
R.M. Jones Vice President, General Counsel AC2400 Anaconda Tower
and Assistant Secretary of 555 Seventeenth
Street
Denver, CO 80202
(303) 298-1000
T.G. Kundert Treasurer and Assistant 2400 Anaconda Tower
Secretary of AC; and Treasurer 555 Seventeenth Street
of Group Denver, CO 80202
(303) 298-1000
C.D. Slater Vice President and Secretary 2400 Anaconda Tower
of AC; and director of Company 555 Seventeenth Street
and Group Denver, CO 80202
(303) 298-1000
N.L. Rooney Chairman, Chief Executive Officer 12201 E. Arapahoe Road
and director of Group Suite C10
Englewood, CO 80112
(303) 792-2535
J.E. Shamas President and director of Group 12201 E. Arapahoe
Road
Suite C10
Englewood, CO 80112
(303) 792-2535
J.M. Couzens Director of Group 12201 E. Arapahoe Road
Suite C10
Englewood, CO 80112
(303) 792-2535
L.T. Wood Senior Vice President and 12201 E. Arapahoe Road
Secretary of Group Suite C10
Englewood, CO 80112
(303) 792-2535
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During the past five years, none of Group, AC, Anschutz and the
executive officers and directors of Group or AC has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Group, AC and their affiliated companies, including Rio Grande
Industries and Southern Pacific Rail Corporation, are principally engaged in
transportation, exploration and development of natural resources, real estate
development, telecommunications and the ownership of two professional sports
franchises.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On the First Closing Date (as defined below) Group paid the Company
$900,000 to purchase the convertible promissory note of the Company referred to
below as the Note and, upon the conversion thereof in accordance with the terms
thereof (following the satisfaction of certain conditions of which certain
material conditions are not within the control of Group, AC or Anschutz), the
300,000 shares of Common Stock referred to below as the Conversion Shares. The
funds for the purchase of the Note (and, upon the conversion thereof, the
Conversion Shares) were provided by cash and short-term investments of Group.
On the Second Closing Date (as defined below) the Company merged
(the "MERGER") its wholly owned subsidiary, Internet Acquisition One, Inc., a
Colorado corporation ("MERGER SUB"), into Interwest Communications C.S.
Corporation, a Colorado corporation and a wholly-owned subsidiary of Group
("INTERWEST"), with Interwest being the surviving corporation, pursuant to
which the Company acquired all of the shares of capital stock of Interwest in
exchange for 2,306,541 shares of Common Stock issued by the Company to Group.
ITEM 4. PURPOSE OF TRANSACTION
The Company and Group entered into a Share Exchange Agreement dated
as of May 29, 1996, as amended by letter agreement dated May 29, 1996, and as
amended and restated by the Amended and Restated Acquisition Agreement (in the
form attached hereto as Exhibit 1) (such Share Exchange Agreement, as so amended
and restated, the "ACQUISITION AGREEMENT"), pursuant to which (i) on May 29,
1996 (the "FIRST
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CLOSING DATE") Group acquired a convertible promissory note of the Company
(in the form attached hereto as Exhibit 2) that, upon the satisfaction of
certain conditions (of which certain material conditions are not within the
control of Group, AC or Anschutz), is convertible at the election of the
holder thereof, into 300,000 shares of Common Stock and (ii) on September 19,
1996 (the "SECOND CLOSING DATE") the Merger was consummated, pursuant to
which (a) Merger Sub was merged into Interwest, with Interwest being the
surviving corporation, (b) Interwest became a wholly owned subsidiary of the
Company and (c) Group acquired beneficial ownership of 2,306,541 shares of
Common Stock (referred to below as the Additional Shares).
A. SUMMARY OF TRANSACTIONS.
The following brief summary and description of certain provisions of
the Acquisition Agreement and certain related documents referred to therein,
including the Note and the Registration Rights Agreement, do not purport to be
complete summaries or descriptions thereof and are subject to and qualified in
their entirety by reference to the Acquisition Agreement (including the exhibits
attached thereto), the Note and the Registration Rights Agreement, which are
attached hereto as Exhibits 1, 2 and 3, respectively, and to the other documents
referred to below. Capitalized terms that are not defined herein shall have the
meanings ascribed to such terms in the Acquisition Agreement, Note or
Registration Rights Agreement, as applicable.
NOTE. On the First Closing Date, at par and for cash, the
Company issued and sold to Group a promissory note of the Company in the form
attached hereto as Exhibit 2 (the "NOTE") (a) in the principal amount of
$900,000, (b) having a maturity on December 31, 1996, or, if earlier, the date
that is 30 days after the earlier to occur of (i) the failure of the
shareholders of the Company to approve the Transaction Documents and the
Transactions at the Shareholders Meeting (each as defined in the Acquisition
Agreement) and (ii) the termination of the Acquisition Agreement by Group
pursuant to the terms thereof, including, without limitation, upon the breach by
the Company of any representation or warranty in the Acquisition Agreement, any
modification or amendment of the Recommendations (as defined in the Acquisition
Agreement) by the Company in any respect materially adverse to Group, the
acquisition by any person other than Group of 30% or more of the outstanding
shares of Common Stock or the occurrence of a Subsequent Event (as defined in
the Acquisition Agreement) with respect to the Company or a subsidiary, and (c)
bearing interest at the rate of 8.0% per annum from the First Closing Date to
and including July 28, 1996 (or, if the Second Closing Date shall then have
occurred, August 27, 1996) and the rate of 12.5% per annum thereafter, payable
monthly in arrears or, upon the occurrence and during the
8
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continuation of a default under the Note, at a rate of interest 3.5% per anum
greater than the rate otherwise applicable; PROVIDED that, if the Company
shall fail to pay in full the principal amount of the Note and all interest
accrued thereon at the maturity thereof (whether at scheduled maturity, on
the date of any required prepayment or, after the expiration of applicable
grace periods and cure periods, upon acceleration), then, at any time during
the period commencing the day after the date of such maturity of the Note (if
the principal amount thereof and all interest accrued thereon shall then not
have been paid in full) and ending on a date that is 45 days after the date
of such maturity, Group may elect to convert the Note into 300,000 shares of
the Company Common Stock (the "CONVERSION SHARES") at a price of $3.00 per
share (as such number of shares and price per share may be adjusted pursuant
to the terms thereof).
ADDITIONAL SHARES. On the Second Closing Date, the Company
issued in consideration of the Merger 2,306,541 shares of Common Stock of the
Company (the "ADDITIONAL SHARES" and, collectively with the Conversion Shares,
the "COMPANY SHARES") such that the number of Additional Shares issued to
Group was equal to approximately 48.96% of the 4,711,227 shares of Common Stock
issued and outstanding immediately following consummation of the Merger.
CERTAIN AFFIRMATIVE COVENANTS. Section 5.1 of the Acquisition
Agreement provides that the Company, effective at the Second Closing, shall have
increased the size of its board of directors from five to eight, divided the
board of directors into three classes (with one vacancy per class) and caused
the vacancy in each class to be filled by a person designated by Group
(collectively, "GROUP DESIGNEES"), which Group Designees shall serve in such
capacity, until the next annual meeting of the shareholders of the Company.
Section 5.1 also provides that the Company shall take any action required to
qualify the Company Shares for inclusion in the National Association of
Securities Dealers Automated Quotations/Small Cap Market ("NASDAQ/SMALL CAP").
Section 5.2 of the Acquisition Agreement provides that the Company, Group and
their respective Subsidiaries (including Interwest) shall undertake certain
actions with respect to the maintenance of existence, compliance with laws, use
of best efforts to complete the Transactions, coordination of publicity
regarding the Transactions, maintenance of confidentiality of information,
reporting of specified information to the other party, maintenance of records,
maintenance of properties, conduct of business, maintenance of insurance,
payment of taxes, reservation of shares of Common Stock to be issued pursuant to
the Transaction Documents, and further assurances.
9
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REGISTRATION RIGHTS AGREEMENT. On the First Closing Date, as
contemplated by Section 1.1(a)(2) of the Acquisition Agreement, the Company
and Group entered into a Registration Rights Agreement (in the form attached
hereto as Exhibit 3, the "REGISTRATION RIGHTS AGREEMENT") pursuant to which,
among other things, Group will have the right on five occasions, commencing
on the second anniversary of the First Closing Date, to register the Company
Shares (collectively, the "REGISTRABLE SHARES") under the Securities Act of
1933, as amended (the "SECURITIES ACT") and, commencing on the first
anniversary of the First Closing Date, to cause the Company to include
Registrable Shares in any registration statement filed under the Securities
Act offering any other shares of Common Stock.
B. PURPOSE OF THE TRANSACTIONS.
Group's purpose in entering into the Acquisition Agreement and
acquiring the Additional Shares pursuant thereto is to acquire a significant
equity position in the Company and to influence the management, policies and
activities of the Company. Group, AC and Anschutz believe that the
recapitalization of the Company as contemplated by the Acquisition Agreement
will enhance the capital structure of the Company and will better position the
Company to take advantage of acquisition and growth opportunities in the
communications industry. On the Second Closing Date, Craig D. Slater, Robert L.
Smith and John M. Couzens, each designated by Group, were elected as directors
of the Company for terms expiring at the annual meetings of the shareholders of
the Company scheduled to be held in 1997, 1998 and 1999, respectively. On and
after the Second Closing Date, through the membership of Group Designees on the
Board of Directors of the Company, Group, AC and Anschutz believe that Group
will have considerable influence over the management, policies and activities of
the Company.
Group may decide to sell any or all of the Additional Shares, any
portion or all of the Note or, upon the conversion thereof, any or all of the
Conversion Shares. Group, AC and Anschutz may acquire or dispose of other
shares of Common Stock or other Equity Securities of the Company. As defined in
the Acquisition Agreement, "EQUITY SECURITIES" of a person means the capital
stock of the person and all other securities convertible into or exchangeable or
exercisable for any shares of its capital stock, all rights to subscribe for or
to purchase, all options for the purchase of, and all calls, commitments or
claims of any character relating to, any shares of its capital stock and any
securities convertible into or exchangeable or exercisable for any of the
foregoing.
The amount, timing and conditions of any such possible purchase or
sale of any shares of Common Stock or
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other Equity Securities of the Company by Group, AC or Anschutz will depend
upon the continuing assessment by Group, AC and Anschutz of all relevant
factors, including without limitation the following: the Company's business
and prospects; the attitude and actions of the management, board of directors
and other stockholders of the Company; other business and investment
opportunities available to Group, AC and Anschutz; the business and prospects
of Group, AC and Anschutz; economic conditions generally and in the
communications industry particularly; stock market, commodity market and
money market conditions; the availability and nature of opportunities to
dispose of the securities of the Company owned by Group, AC and Anschutz; the
availability and nature of opportunities for Group, AC and Anschutz to
purchase additional securities of the Company; and other plans and
requirements of Group, AC and Anschutz. Depending upon their assessment of
these factors from time to time, Group, AC and Anschutz may change their
present intentions as stated above.
The determination of Group, AC and Anschutz to have Group make an
equity investment in the Company was made in the context of an overall review of
the Company, which included the possibility (which Group, AC and Anschutz intend
to continue or consider) of seeking to acquire the Company as an entirety,
although none of Group, AC and Anschutz have any present plans in this regard.
Should one or more of Group, AC and Anschutz in the future seek to acquire
control of the Company (including, without limitation, by means of market or
privately negotiated purchases of securities of the Company, a tender offer,
merger or otherwise), the prior establishment of an equity position in the
Company might assist them in reaching such result.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Group may be deemed to be the direct beneficial owner, and AC and
Anschutz may be deemed to be indirect beneficial owners, of 2,306,541 shares of
Common Stock referred to in Item 4 as the Additional Shares that have been
issued to Group on the Second Closing Date in connection with the Merger. Based
upon the number of shares of Common Stock that were issued and outstanding on
the Second Closing Date, such number of shares of Common Stock is equal to
approximately 48.96% of the number of shares of Common Stock outstanding as of
the Second Closing Date after giving effect to the issuance of such shares.
Group may be deemed to be the direct beneficial owner, and AC and
Anschutz may be deemed to be indirect beneficial owners, of 300,000 shares of
Common Stock referred to in Item 4 as the Conversion Shares that are issuable
upon conversion of the convertible promissory note referred to in
11
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Item 4 as the Note. Based upon the number of shares of Common Stock that
were issued and outstanding on the Second Closing Date after giving effect to
the issuance of the Additional Shares, such number of shares of Common Stock
is equal to approximately 5.99% of the number of shares of Common Stock that
would be outstanding as of the Second Closing Date after giving effect to the
issuance of such Conversion Shares. However, each of Group, AC and Anschutz
disclaim such beneficial ownership because the acquisition of such Conversion
Shares is subject to the satisfaction of material conditions not within the
control of Group, AC or Anschutz.
Based on the number of shares of Common Stock outstanding on the
Second Closing Date, and assuming the issuance to Group of 300,000 Conversion
Shares upon the conversion of the Note in addition to the beneficial ownership
by Group of 2,306,541 Additional Shares, Group, AC and Anschutz would own
2,606,541 shares of Common Stock, or approximately 52.01% of the shares of
Common stock that would be outstanding as of the Second Closing Date after
giving effect to the issuance of all such shares.
Group, AC and Anschutz may be deemed to direct the disposition of
the Note and, upon the conversion thereof, to share the power both to vote and
to direct the disposition of the Conversion Shares. Group, AC and Anschutz may
also be deemed to share the power both to vote and to direct the disposition of
the Additional Shares of the Company referred to above if and when beneficial
ownership thereof is acquired by Group. Reference is made to Item 4 for a
summary of the transactions pursuant to which Group may acquire such beneficial
ownership.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF ISSUER
Reference is made to Item 4 above and the Exhibits filed herewith
for a description of the Acquisition Agreement, the Note and the Registration
Rights Agreement and certain other documents referred to in Item 4.
12
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Amended and Restated Acquisition Agreement dated as of
May 29, 1996 among Internet Communications Corporation,
Interwest Group, Inc. and Internet Acquisition One, Inc.
incorporated by reference to Appendix C to the Proxy
Statement of Internet Communications Corporation on
Schedule 14A dated August 12, 1996, as filed with the
Securities and Exchange Commission.
Exhibit 2 Convertible Promissory Note dated May 29, 1996 of
Internet Communications Corporation.
Exhibit 3 Registration Rights Agreement dated as of May 29, 1996
between Internet Communications Corporation and
Interwest Group, Inc.
Exhibit 4 Agreement Re Joint Filing.
13
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SIGNATURE
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.
September 27, 1996
INTERWEST GROUP, INC.
By /s/ THOMAS G. KUNDERT
----------------------------
Thomas G. Kundert, Treasurer
14
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SIGNATURE
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.
September 27, 1996
ANSCHUTZ COMPANY
By /s/ PHILIP F. ANSCHUTZ
----------------------
Philip F. Anschutz
15
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SIGNATURE
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.
September 27, 1996
PHILIP F. ANSCHUTZ
/s/ PHILIP F. ANSCHUTZ
- ----------------------
16
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EXHIBIT INDEX
Amended and Restated Acquisition Agreement . . . . . . .Exhibit 1
dated as of May 29, 1996 among Internet
Communications Corporation, Interwest
Group, Inc. and Internet Acquisition One,
Inc. incorporated by reference to Appendix C
to the Proxy Statement on Schedule 14A of
Internet Communications Corporation dated
August 12, 1996, as filed with the Securities
and Exchange Commission.
Convertible Promissory Note dated May 29, . . . . . . . Exhibit 2
1996 of Internet Communications Corporation.
Registration Rights Agreement dated as of . . . . . . . Exhibit 3
May 29, 1996 between Internet Communications
Corporation and Interwest Group, Inc.
Agreement Re Joint Filing. . . . . . . . Exhibit 4
17
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INTERNET COMMUNICATIONS CORPORATION
CONVERTIBLE PROMISSORY NOTE
DUE DECEMBER 31, 1996
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE
WITH SAID ACT. THIS NOTE AND SUCH SHARES ARE ALSO SUBJECT TO THE RESTRICTIONS
CONTAINED IN A REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 29, 1996, A COPY OF
WHICH IS ON FILE AT THE OFFICE OF THE SECRETARY OF THE COMPANY.
$900,000.00 Englewood, Colorado
May 29, 1996
FOR VALUE RECEIVED, INTERNET COMMUNICATIONS CORPORATION, a Colorado
corporation (the "COMPANY"), promises to pay to the order of INTERWEST GROUP,
INC. or its assigns (the "HOLDER"), on December 31, 1996 (or such earlier date
on which the principal amount hereof shall be payable in accordance with the
terms hereof, the "MATURITY DATE"), the principal amount of NINE HUNDRED
THOUSAND AND NO/100 DOLLARS ($900,000.00).
The unpaid principal amount of this Note shall be prepaid in full on
the date that is 30 days after the earlier to occur of (1) the failure of
shareholders of the Company, at a meeting thereof duly called, noticed and
convened, to approve the Transaction Documents and the Transactions and (2) the
termination of the Share Exchange Agreement by Group pursuant to Section 6.1(a)
of the Share Exchange Agreement.
The Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, (a) at the rate of 8.0%
per annum from the date hereof to and including July 28, 1996 or, if the Second
Closing Date shall have occurred on or before July 28, 1996, to and including
August 27, 1996, and (b) at the rate of 12.5% per annum thereafter. Interest on
this Note shall be payable in arrears on and to the last calendar day of each
month, upon any payment or conversion of this Note (to the extent accrued on the
amount being paid or converted) and at maturity (whether at stated maturity, on
the date of any required prepayment, upon acceleration or otherwise) of this
Note. Interest shall be computed on the basis of a year of twelve 30-day
months. Upon the occurrence and during the continuation of an Event of Default
<PAGE>
(as defined below), interest shall accrue at the rate that is 3.5% per annum
greater than the rate otherwise applicable and interest shall be payable on
demand.
SECTION 1. SHARE EXCHANGE AGREEMENT. This Note is the "Note"
referred to in the Share Exchange Agreement dated as of May 29, 1996 between the
Company and Interwest Group, Inc. (as amended or modified from time to time, the
"SHARE EXCHANGE AGREEMENT"), to which reference is hereby made for a more
complete statement of the terms and conditions under which the indebtedness
evidenced hereby was incurred and is to be repaid. Terms not otherwise defined
herein have the respective meanings assigned in the Share Exchange Agreement.
No reference herein to the Share Exchange Agreement and no provision of this
Note or the Share Exchange Agreement shall alter or impair the obligations of
the Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
SECTION 2. PAYMENT.
(a) All payments of principal and interest in respect of this
Note shall be made in lawful money of the United States of America in same day
funds at the office of the Holder located at 12201 East Arapahoe Road, Suite
C10, Englewood, Colorado 80112, or at such other place as shall be designated in
writing by the Holder. Until notified in writing of the transfer or assignment
of this Note, the Company shall be entitled to deem the Holder or any subsequent
permitted assignee of this Note as the owner and holder of this Note. Each of
the Holder and any subsequent assignee of this Note agrees, by its acceptance
hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; PROVIDED, HOWEVER, that the failure
to make a notation of any payment made on this Note shall not limit or otherwise
affect the obligations of the Company hereunder with respect to payments of
principal of or interest on this Note.
(b) Whenever any payment on this Note shall be stated to be due
on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
(c) No principal amount of this Note may be paid before such
principal amount is due, whether at stated maturity, by acceleration or
otherwise, except pursuant to the conversion hereof in accordance with
Section 5.
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SECTION 3. EVENTS OF DEFAULT. If any of the following conditions
or events ("EVENTS OF DEFAULT") shall occur:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. Failure to pay any
amount of principal of this Note when due (whether at stated maturity, on the
date of any required prepayment or upon acceleration, or otherwise), or failure
to pay interest or any other amount due under this Note on or before the fifth
day after the date due; or
(b) DEFAULT IN OTHER AGREEMENTS. (i) Failure of the Company or
any of its Subsidiaries (as such term is defined in the Share Exchange
Agreement) to pay when due any principal of or interest on any Debt (other than
this Note) (A) in the aggregate amount of $50,000 beyond the end of any grace
period provided therefor or (B) in any amount beyond 60 days after the end of
any grace period provided therefor; or (ii) breach or default by the Company or
any of its Consolidated Subsidiaries with respect to any other material term of
(A) any evidence of any Debt or (B) any loan agreement, mortgage, indenture or
other agreement relating to such Debt, if the effect of such breach or default
is to cause, or to permit the holder or holders of that Debt (or a trustee on
behalf of such holder or holders) to cause, that Debt to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or (iii) termination of the Share
Exchange Agreement pursuant to paragraph (5) of Section 6.1(a) thereof; or
(c) BREACH OF WARRANTY. Any representation, warranty,
certification or other statement of the Company made in any Transaction Document
or in any statement or certificate at any time given in writing pursuant hereto
or thereto or in connection therewith shall be false in any material respect on
the date as of which made and such default shall not have been remedied or
waived within 30 days after the earlier of (i) the Company's obtaining knowledge
of such default or (ii) receipt by the Company of notice from the Holder of such
default; PROVIDED, HOWEVER, that if such default cannot be cured solely by the
payment of money and the cure of such default requires a period in excess of 30
days, and if the Company is diligently and continuously prosecuting such cure,
then such default shall not be an Event of Default unless the Company fails to
cure such default within 90 days after the Company's obtaining knowledge or
notice thereof, as the case may be; or
(d) FAILURE OF ENFORCEABILITY. Any Transaction Document shall,
at any time, cease to be in full force and effect or shall be declared null and
void by a court of competent jurisdiction, or the validity or enforceability
thereof shall be contested by the Company, in each case for any reason other
than the failure of the Holder to take any action within its control; or
(e) OTHER DEFAULTS UNDER TRANSACTION DOCUMENTS. The Company
shall default in any material respect in the performance of or compliance with
any term contained in any Transaction Document, other than any such term
referred to in any other clause of this subsection, and such default shall not
have been remedied or waived within 30 days after the
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earlier of (i) the Company's obtaining knowledge of such default or (ii) receipt
by the Company of notice from the Holder of such default; PROVIDED, HOWEVER,
that if such default cannot be cured solely by the payment of money and the cure
of such default requires a period in excess of 30 days, and if the Company is
diligently and continuously prosecuting such cure, then such default shall not
be an Event of Default unless the Company fails to cure such default within 90
days after the Company's obtaining knowledge or notice thereof, as the case may
be; or
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company, in an involuntary case under Title 11 of the
United States Code entitled "Bankruptcy" as now and hereafter in effect, and any
successor statute, (the "BANKRUPTCY CODE") or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against the Company under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Company or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of the Company
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of the Company, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) The
Company shall have an order for relief entered with respect to it, in connection
with, or shall commence, a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or the Company shall make any assignment for the benefit of creditors;
or (ii) the Company shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors (or any committee thereof) of the Company shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or
warrant of attachment or similar process involving in the aggregate at any time
an amount in excess of $10,000 (not adequately covered by insurance as to which
a solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against the Company or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
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thereunder); it being understood and agreed that, in the event the Company posts
a bond pursuant to this Section 3(h), such bond shall not be considered Debt of
the Company for purposes of this Note; or
(i) DISSOLUTION. Any order, judgment or decree shall be entered
against the Company decreeing the dissolution or split up of the Company and
such order shall remain undischarged or unstayed for a period in excess of 30
days; or
(j) EMPLOYEE BENEFIT PLANS. There shall occur one or more
Employee Plan Events which individually or in the aggregate results in or might
reasonably be expected to result in liability of the Company or any of its ERISA
Affiliates in excess of $10,000 on or before the Maturity Date; or there shall
exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Employee
Plans (excluding for purposes of such computation any Employee Plans with
respect to which assets exceed benefit liabilities and all Multiemployer Plans),
which exceeds $10,000;
then, (A) upon the occurrence of any Event of Default described in Section 3(f)
or 3(g), each of (1) the unpaid principal amount of and accrued interest on this
Note and (2) all other Obligations shall automatically become immediately due
and payable, without notice, presentment, demand, protest or other requirements
of any kind, all of which are hereby expressly waived by the Company, and
(B) upon the occurrence and during the continuance of any other Event of
Default, the Holder may, by written notice to the Company, declare all or any
portion of the amounts described in clauses (1) and (2) above to be, and the
same shall forthwith become, immediately due and payable.
SECTION 4. REMEDIES.
(a) Upon the occurrence and during the continuation of an Event
of Default, all or any one or more of the rights, powers, privileges and other
remedies available to the Holder against the Company under this Note (including,
without limitation, the conversion of this Note pursuant to Section 5) or any of
the other Transaction Documents, or at law or in equity, may be exercised by the
Holder at any time and from time to time, whether or not all or any portion of
the obligations hereunder shall be declared due and payable. Any such actions
taken by the Holder shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as the Holder may determine in its sole discretion, to the fullest
extent permitted by law, without impairing or otherwise affecting the other
rights and remedies of the Holder permitted by law, equity or contract or as set
forth herein or in the other Transaction Documents.
(b) The rights, powers and remedies of the Holder under this
Note shall be cumulative and not exclusive of any other right, power or remedy
which the Holder may have against the Company pursuant to the Share Exchange
Agreement, this Note or the other Transaction Documents or existing at law or in
equity or otherwise. The rights, powers and
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remedies of the Holder may be pursued singly, concurrently or otherwise, at such
time and in such order as the Holder may determine in its sole discretion. No
delay or omission to exercise any remedy, right or power accruing upon an Event
of Default shall impair any such remedy, right or power or shall be construed as
a waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of any Event of
Default with respect to the Company shall not be construed to be a waiver of any
subsequent Event of Default by the Company or to impair any remedy, right or
power consequent thereon.
(c) The remedies set forth in this Section 4 are subject to the
provisions of Section 8.
SECTION 5. CONVERSION.
(a) OPTIONAL CONVERSION FOLLOWING MATURITY DATE. This Note may
be converted into shares of Common Stock, as follows:
(1) If the principal amount hereof and all interest accrued thereon
shall not have been paid in full on the Maturity Date (whether at stated
maturity, on the date of any required prepayment, upon acceleration or
otherwise), then, during the period commencing on the day following the
Maturity Date and ending at the close of business on the date that is 45
days after the Maturity Date, and subject to and upon compliance with the
provisions of this Section 5, at the option of the Holder, this Note or any
portion of the principal amount hereof which is $1,000 or an integral
multiple thereof, may be converted at the principal amount thereof into
shares of Common Stock, as said shares shall be constituted on the date on
which this Note shall be surrendered for conversion and notice given in
accordance with the provisions of this Section (the "CONVERSION DATE"), at
the Conversion Price (as defined below) in effect at the Conversion Date.
(2) In order to exercise the conversion privilege, the Holder shall
surrender this Note to the Company at its executive offices, together with
the conversion notice in the form attached hereto as Exhibit A (or similar
separate written notice) duly executed, and, if so required by the Company,
accompanied by instruments of transfer, in form satisfactory to the
Company, duly executed by the Holder or by its duly authorized attorney in
writing. As promptly as practicable after the surrender of this Note for
conversion as aforesaid, the Company shall deliver at its executive office
to such Holder, or on its written order, a certificate or certificates for
the number of full shares of Common Stock deliverable upon the conversion
of this Note or portion thereof (the "CONVERSION SHARES") and a check or
cash in respect of any fraction of a share of Common Stock otherwise
deliverable upon such conversion, all as provided in this Section 5,
together with a Note in principal amount equal to the unconverted and
unredeemed portion, if any, of this Note so converted. Such conversion
shall be deemed to have been effected on the date on which such notice
shall have been received at said executive offices and this Note shall have
been surrendered as aforesaid, and the person or persons in whose
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name or names any certificate or certificates for Conversion Shares shall
be deliverable upon such conversion shall be deemed to have become on said
date the holder or holders of record of the shares represented thereby;
PROVIDED, HOWEVER, that any such surrender on any date when the stock
transfer books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificates are to be delivered as
the record holder or holders thereof for all purposes on the next
succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date of such
surrender. Subject to the foregoing, no payment or adjustment shall be
made for dividends on any Shares that shall be delivered upon the
conversion of this Note.
(3) Notwithstanding any other provision hereof, (A) if the conversion
of any principal amount of this Note is to be made in connection with a
Business Combination Transaction, the exercise of the conversion privilege
may at the election of the Holder be conditioned upon the conclusion of
such transaction, in which case such exercise shall not be deemed to be
effective until the conclusion of such transaction and (B) if the issuance
of any Conversion Shares pursuant to the conversion of any principal amount
of this Note is not exempt from the applicable requirements under the Hart-
Scott-Rodino Act, the exercise of the conversion privilege shall be
conditioned upon the compliance by the Company, the Holder and all other
persons with such requirements, in which case such exercise shall not be
deemed to be effective until all such requirements are satisfied. The
Holder may by written notice withdraw any such exercise of such conversion
privilege before the effectiveness thereof. Any such exercise or withdrawal
shall not impair or otherwise affect the other rights and remedies of the
Holder permitted by law, equity or contract or as set forth herein or in the
other Transaction Documents.
(b) FRACTIONAL INTERESTS. The Company shall not be required to
deliver fractions of shares of Common Stock upon conversions of this Note. If
any fractional interest in a share of Common Stock would be deliverable upon the
conversion of this Note, the Company shall make an adjustment therefor in cash
equal to the average market price per share (determined as provided below) of
the Common Stock on the Conversion Date.
(c) MECHANICAL ADJUSTMENTS. The number of Conversion Shares
issuable upon the conversion of this Note and the Conversion Price shall be
subject to adjustment from time to time, as follows:
(1) If the Company shall at any time pay a dividend on its Common
Stock in shares of its Common Stock (including, if applicable, shares of
Common Stock held by the Company in treasury or by a Subsidiary), subdivide
its outstanding shares of Common Stock into a larger number of shares or
combine its outstanding shares of Common Stock into a smaller number of
shares or otherwise effect a reclassification or recapitalization of the
Common Stock, then in each such case the number of Conversion Shares
thereafter issuable upon conversion of this Note shall be adjusted so that
this Note shall thereafter
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<PAGE>
be convertible into the number of Conversion Shares equal to the number of
shares of Common Stock which the Holder would have held after the
occurrence of any of the events described above had this Note been
exercised in full immediately prior to the occurrence of such event. An
adjustment made pursuant to this paragraph (1) shall become effective
retroactively to the related record date in the case of a dividend and
shall become effective on the related effective date in the case of a
subdivision, combination, reclassification or recapitalization.
(2) Except with respect to Permitted Issuances, if the Company or a
Subsidiary shall at any time issue or sell shares of Common Stock at a
purchase price per share of Common Stock (the value of any consideration,
if other than cash, to be determined in good faith by the Board of
Directors) less than the Average Market Price per share (determined as
provided below) of the Common Stock on the date of issuance or sale (for
the purpose of this paragraph (2), the "ADJUSTMENT DATE"), then in each
such case, the number of Conversion Shares thereafter issuable upon
conversion of this Note after such Adjustment Date shall be determined by
multiplying the number of Conversion Shares issuable upon conversion of
this Note on the date immediately preceding such Adjustment Date by a
fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding on such date of issuance or sale and the number
of additional shares of Common Stock so issued or sold, and the denominator
of which shall be the sum of the number of shares of Common Stock
outstanding on such date of issuance or sale and the number of shares of
Common Stock which the aggregate offering price of the total number of
shares so offered would purchase at such Average Market Price. For the
purposes of this paragraph (2), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the
Company or by a Subsidiary.
(3) If the Company or a Subsidiary shall at any time issue or sell
Derivative Securities (as defined below) providing for the purchase of
shares of Common Stock upon the conversion, exchange or exercise thereof at
a price per share of Common Stock (taking into account any consideration
received by the Company upon the issuance or sale of such Derivative
Securities and any additional consideration to be received upon the
conversion, exchange or exercise thereof, the value of such consideration,
if other than cash, to be determined in good faith by the Board of
Directors) less than the Average Market Price per share (determined as
provided below) of the Common Stock on the date of issuance or sale (for
the purpose of this paragraph (3), the "ADJUSTMENT DATE"), then in each
such case, the number of Conversion Shares thereafter issuable upon
conversion of this Note after such Adjustment Date shall be determined by
multiplying the number of Conversion Shares issuable upon conversion of
this Note on the date immediately preceding such Adjustment Date by a
fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding on such Adjustment Date and the number of
additional shares of Common Stock so offered for subscription or purchase
upon the conversion, exchange or exercise of such Derivative Securities,
and the denominator of
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<PAGE>
which shall be the sum of the number of shares of Common Stock outstanding
on such Adjustment Date and the number of shares of Common Stock which the
aggregate offering price of the total number of shares so offered would
purchase at such Average Market Price. Such adjustment shall be made
whenever any such Derivative Securities are issued, and shall become
effective on the date of issuance retroactive to the Adjustment Date. If
all the shares of Common Stock so offered for subscription or purchase are
not delivered upon the final conversion, exchange or exercise of such
Derivative Securities, then, upon the final conversion, exchange or
exercise of such Derivative Securities, or the expiration, cancellation or
other termination thereof, the number of Conversion Shares issuable upon
conversion of this Note shall thereafter be readjusted to the number of
Conversion Shares which would have been in effect had the numerator and the
denominator of the foregoing fraction and the resulting adjustment been
made based upon the number of shares of Common Stock actually delivered
upon the conversion, exchange or exercise of such Derivative Securities, or
the expiration, cancellation or other termination thereof rather than upon
the number of shares of Common Stock so offered for subscription or
purchase. If the purchase price provided for in any Derivative Securities,
the additional consideration, if any, payable upon the conversion, exchange
or exercise of any Derivative Securities or the rate at which any
Derivative Securities are convertible into or exchangeable or convertible
into Common Stock shall change at any time (including, without limitation,
at the time of or after such conversion, exchange or exercise), the number
of Conversion Shares issuable upon conversion of this Note in effect at the
time of such change shall be readjusted to the number of Conversion Shares
issuable upon conversion of this Note which would have been in effect at
such time had such Derivative Securities still outstanding provided for
such changed purchase price, additional consideration or changed conversion
rate, as the case may be, on the related Adjustment Date, and such
readjustment shall become effective on the date of such change retroactive
to the Adjustment Date; PROVIDED, that no such readjustment shall have the
effect of decreasing the number of Conversion Shares issuable upon the
conversion of this Note by an amount in excess of the amount of the
adjustment initially made with respect to the issuance or sale of the
Derivative Securities. For the purposes of this paragraph (3), the number
of shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company or by a Subsidiary.
(4) If the Company shall at any time declare or pay a dividend or
other distribution on its Common Stock other than a stock dividend payable
solely in shares of Common Stock or a cash dividend paid out of current
earnings (the value of any such dividend or other distribution, if other
than cash, to be determined in good faith by the Board of Directors), then
in each such case, the number of Conversion Shares thereafter issuable upon
conversion of this Note after the declaration date therefor (for the
purpose of this paragraph (4), the "ADJUSTMENT DATE") shall be determined
by multiplying the number of Conversion Shares issuable upon conversion of
this Note on the date immediately preceding such Adjustment Date by a
fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding on such Adjustment
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Date and the number of additional shares of Common Stock which the
aggregate value of such dividend or distribution would purchase at such
Average Market Price and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding on such Adjustment Date. For
the purposes of this paragraph (4), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company or by a Subsidiary.
(5) If the Company or a Subsidiary shall at any time purchase shares
of Common Stock at a price per share of Common Stock (the value of any
consideration, if other than cash, to be determined in good faith by the
Board of Directors) less the Average Market Price per share (determined as
provided below) of the Common Stock on the date of such purchase (for the
purpose of this paragraph (5), the "ADJUSTMENT DATE"), then in each such
case, the number of Conversion Shares thereafter issuable upon conversion
of this Note after such Adjustment Date shall be determined by multiplying
the number of Conversion Shares issuable upon conversion of this Note on
the date immediately preceding such Adjustment Date by a fraction, the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding on such Adjustment Date and the number of additional shares of
Common Stock which the aggregate purchase price of the total number of
shares so purchased would purchase at such Average Market Price and the
denominator of which shall be the sum of the number of shares of Common
Stock outstanding on such Adjustment Date and the number of shares of
Common Stock so purchased. For the purposes of this paragraph (5), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company or by a Subsidiary.
(6) In case of any capital reorganization or any reclassification
(other than a change in par value) of the capital stock of the Company, or
of any exchange or conversion of the Common Stock for or into securities of
another corporation, or in case of the consolidation or merger of the
Company with or into any other person (other than a merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or in case of any sale or conveyance of
all or substantially all of the assets of the Company, the person formed by
such consolidation or resulting from such capital reorganization,
reclassification or merger or which acquires such assets, as the case may
be, shall make provision such that this Note shall thereafter be
convertible into the kind and amount of shares of stock, other securities,
cash and other property receivable upon such capital reorganization,
reclassification of capital stock, consolidation, merger, sale or
conveyance, as the case may be, by a holder of the shares of Common Stock
equal to the number of Conversion Shares issuable upon conversion of this
Note immediately prior to the effective date of such capital
reorganization, reclassification of capital stock, consolidation, merger,
sale or conveyance, assuming (1) such holder of Common Stock of the Company
is not a person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made as the case may be ("CONSTITUENT
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ENTITY"), or an affiliate of a constituent entity, and (2) such person
failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such capital
reorganization, reclassification of capital stock, consolidation, merger,
sale or conveyance and, in any case appropriate adjustment (as determined
by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to rights and interests thereafter
of the Holder, to the end that the provisions set forth herein (including
the specified changes in and other adjustments of the number of Conversion
Shares issuable upon conversion of this Note) shall thereafter be
applicable, as near as reasonably may be, in relating to any shares of
stock or other securities or other property thereafter deliverable upon
conversion of this Note.
(7) For the purposes of this Section 5:
(A) "AVERAGE MARKET PRICE" per share of Common Stock on any date
means the average of the daily Closing Prices for the fifteen (15)
consecutive Trading Days commencing twenty (20) Trading Days before
the date of declaration or authorization by the Board of Directors of
the Company of such issuance or distribution;
(B) "CLOSING PRICE" means the last reported sales price, regular
way, per share of Common Stock on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in each case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on a national securities exchange, or, if shares
of such stock are not listed or admitted to trading on a national
securities exchange, on the NASDAQ/National Market System or the
NASDAQ/Small Cap market, as the case may be, or, if such last sales
price or closing bid and asked prices are not so reported, the average
of the closing bid and asked prices as furnished by any New York Stock
Exchange member firm selected from time to time by the Board of
Directors for such purpose, or if no such prices are available, the
fair market value of the Common Stock as determined in good faith by
the Board of Directors;
(C) "DERIVATIVE SECURITIES" means securities convertible into or
exchangeable or convertible into shares of Common Stock, rights or
warrants to subscribe for or purchase shares of Common Stock, options
for the purchase of, or calls, commitments or other claims of any
character relating to, shares of Common Stock or any securities
convertible into or exchangeable for any of the foregoing; and
(D) "PERMITTED ISSUANCES" means the issuance of shares of Common
Stock after the date of this Note (i) pursuant to the exercise of
Outstanding Options, in each case in accordance with the terms thereof
as of the date of this
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<PAGE>
Note, (ii) pursuant to the conversion of this Note and (iii) with the
approval of Holder, which approval may be granted, withheld,
conditioned or delayed in its sole discretion.
(8) If any shares of Common Stock or Derivative Securities are issued
or sold or deemed to have been issued or sold for cash, the consideration
received therefor shall be deemed to be the net amount received by the
Company therefor. In case any shares of Common Stock or Derivative
Securities are issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Company shall
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of
consideration received by the Company shall be the market price thereof as
of the date of receipt. In case any shares of Common Stock or Derivative
Securities are issued to the owners of the non-surviving entity in
connection with any merger or other business combination in which the
Company is the surviving entity, the amount of consideration therefor shall
be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such shares of
Common Stock or Securities, as the case may be. The fair value of any
consideration other than cash or marketable securities shall be determined
jointly by the Company and the Holder. If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Holder, whose
determination shall be final and binding on the Company and the Holder.
The fees and expenses of such appraiser shall be paid by the Company.
(9) If the Company takes a record of the holders of Common Stock for
the purpose of entitling them (A) to receive a dividend or other
distribution on its Common Stock or (B) to subscribe for or purchase shares
of Common Stock or Derivative Securities, then such record date shall be
deemed to be the date of the payment or distribution of such dividend or
other distribution or the date of issuance and sale of any shares of Common
Stock deemed to have been issued or sold in connection thereto.
(10) All calculations under this Section 5 shall be made to the
nearest one-thousandth of a share of Common Stock.
(11) The price payable by the Holder for the issuance of Conversion
Shares by the Company upon conversion of this Note (the "CONVERSION PRICE")
is $3.00 per Conversion Share at the date of this Note. Whenever the
number of Conversion Shares issuable upon the conversion of this Note is
adjusted or readjusted pursuant to paragraphs (1) through (10), inclusive,
above, the Conversion Price payable upon conversion of this Note shall be
adjusted or readjusted by multiplying the Conversion Price immediately
prior to the related Adjustment Date by a fraction, the numerator of which
shall be the number of Conversion Shares purchasable upon the conversion of
this Note immediately preceding such Adjustment Date, and the denominator
of which shall be the number of Conversion Shares so purchasable
immediately thereafter; PROVIDED that no such readjustment pursuant
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to paragraph (3) above with respect to the conversion, exchange or
exercise, or expiration, cancellation or other termination, of any
Derivative Securities shall have the effect of increasing the Conversion
Price by an amount in excess of the amount of the adjustment initially made
in respect of the issuance or sale of such Derivative Securities.
(12) If any event occurs of the type contemplated by the provisions
of this Section 5 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the
Company's board of directors shall make an appropriate adjustment in the
number of Conversion Shares issuable upon conversion of this Note and the
Conversion Price so as to protect the rights of the Holder under this Note.
(13) For the purpose of this Section 5, the term "SHARES OF COMMON
STOCK" means (A) the class of stock designated as the Common Stock of the
Company at the date of this Note or (B) any other class of stock resulting
from successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par value, or from
no par value to par value. In the event that at any time, as a result of
an adjustment made pursuant to paragraphs (1) through (4), inclusive,
above, the Holder shall become entitled to receive any shares of the
Company other than shares of Common Stock, thereafter the number of such
other shares so receivable upon conversion of this Note and the Conversion
Price shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Conversion Shares contained in paragraphs (1) through (4), inclusive,
above, and the provisions of Sections 5(d), 5(e) and 5(f), inclusive, with
respect to the Conversion Shares, shall apply on like terms to any such
other shares.
(14) Notwithstanding anything herein to the contrary, there shall be
no adjustment in the number of Conversion Shares or in the Conversion Price
in respect of Permitted Issuances.
(15) In case of any consolidation or merger of the Company with or
into another entity (whether or not the Company is the surviving entity) or
in case of any sale, transfer or lease of all or substantially all of the
assets of the Company, the Company or such successor or purchasing entity,
as the case may be, shall execute with the Holder an agreement that the
Holder shall have the right thereafter upon payment of the Conversion Price
in effect immediately prior to such action to purchase upon conversion of
this Note the kind and amount of shares and other securities, cash and
property that the Holder would have owned or would have been entitled to
receive after the happening of such consolidation, merger, sale, transfer,
lease or conveyance had this Note been exercised in full immediately prior
to such action, and if the successor or purchasing entity is not a
corporation, such person shall provide appropriate tax indemnification with
respect to such shares or other securities and property so that upon
conversion of this Note, the Holder would have the same benefits it
otherwise would have had if such successor or purchasing
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person were a corporation. Such agreement shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in paragraphs (1) through (14), inclusive, above. The
provisions of this paragraph (15) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
(d) TIME OF ADJUSTMENTS. Each adjustment required by Section
5(c) shall be effective as and when the event requiring such adjustment occurs.
(e) NOTICE OF ADJUSTMENT. Whenever the number of Conversion
Shares purchasable upon the conversion of this Note or the Conversion Price is
adjusted as herein provided, the Company shall promptly mail by first class
mail, postage prepaid, to each Holder a certificate of a firm of independent
public accountants selected by the Board of Directors of the Company (who may be
the regular accountants employed by the Company) setting forth the number of
Conversion Shares purchasable upon the conversion of this Note and the
Conversion Price after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate shall be conclusive evidence of the
correctness of such adjustment.
(f) NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section
5(c), no adjustment in respect of any dividends declared or paid on the Common
Stock shall be made during the term of this Note or upon the conversion of this
Note.
(g) TAXES. The issue of stock certificates on conversions of
this Note shall be made without charge to the Holder for any tax in respect of
the issue thereof. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares in any name other than that of the Holder, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
(h) RESERVATION OF SHARES. The Company shall at all times
reserve and keep available out of the aggregate of its authorized but unissued
shares or its issued shares held in its treasury, or both, for the purpose of
effecting the conversion of this Note, such number of its duly authorized shares
of Common Stock as shall from time to time be sufficient to effect the
conversion, exchange or exercise of outstanding securities of the Company
convertible into or exchangeable or exercisable for any shares of the Common
Stock, all rights to subscribe for or to purchase, all options for the purchase
of, and all calls, commitments or claims of any character relating to, any
shares of Common Stock and any securities convertible into or exchangeable or
exercisable for any of the foregoing.
(i) REGISTRATION OR APPROVAL. If any shares of Common Stock
reserved or to be reserved for the purpose of conversion of this Note require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly
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delivered upon conversion, including, without limitation, the Hart-Scott-Rodino-
Act, then the Company covenants that it will in good faith and as expeditiously
as possible endeavor to secure such registration or approval, as the case may
be.
(j) VALIDLY ISSUED, ETC. The Company covenants that all shares
of Common Stock which may be delivered upon conversion of this Note shall upon
delivery be validly issued, fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue or delivery thereof.
(k) NOTICE. In the event:
(1) that the Company shall pay any dividend or make any distribution
to the holders of shares of Common Stock otherwise than in cash charged
against capital surplus, consolidated net earnings or retained earnings of
the Company and its Subsidiaries; or
(2) that the Company shall offer for subscription or purchase, pro
rata, to all of the holders of shares of Common Stock any additional shares
of stock of any class or any securities convertible into or exchangeable
for stock of any class; or
(3) of any reclassification or change of outstanding shares of the
class of Common Stock issuable upon the conversion of this Note (other than
a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or of
any merger or consolidation of the Company with, or merger of the Company
into, another corporation (other than a merger or consolidation in which
the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock issuable
upon conversion of this Note), or of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially
as an entirety or of any Business Combination Transaction;
then, and in any one or more of such events, the Company will give to the Holder
written notice thereof at least fifteen days prior to (A) the record date fixed
with respect to any of the events specified in (1) and (2) above, and (B) the
effective date of any of the events specified in (3) above. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up.
(l) SPECIFIC PERFORMANCE. The Company acknowledges that the
failure of the Company to perform its obligations under this Section 5 will not
be compensable by the payment of monetary damages and hereby waives any defense
to a claim by the Holder that the provisions of this Section 5 be specifically
enforced.
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SECTION 6. LEGENDS.
(a) Each certificate for Conversion Shares and any certificate
issued in exchange therefor or on conversion or upon transfer, except
certificates issued in connection with a sale registered under the Securities
Act of 1933, as amended, and except as provided below, shall bear the legends to
the following effects:
1. "The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be offered, sold,
transferred or otherwise disposed of except in compliance with said Act."
2. "The shares represented by this certificate are subject to
restrictions set forth in the Registration Rights Agreement dated as of May
29, 1996, a copy of which is on file in the office of the Secretary of the
Company."
(b) The legend stated in Section 6(a)(1) shall be removed by
delivery of one or more substitute certificates without such legend if the
holder thereof shall have delivered to the Company a copy of a letter from the
staff of the Securities and Exchange Commission or an opinion of counsel, in
form and substance reasonably satisfactory to the Company, to the effect that
the legend is not required for purposes of the Securities Act of 1933, as
amended.
(c) The legend stated in Section 6(a)(2) shall be removed at
such time as the Warrant Shares are no longer subject to the Registration Rights
Agreement referenced therein.
SECTION 7. COSTS AND EXPENSES. The Company promises to pay all
costs and expenses, including reasonable attorneys' fees incurred in the
collection and enforcement of this Note. The Company and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
SECTION 8. THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF COLORADO.
SECTION 9. SEVERABILITY OF PROVISIONS. Any provision of this Note
that is prohibited or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Note or
affecting the validity or enforceability of the provision in any other
jurisdiction.
SECTION 10. HEADINGS AND REFERENCES. Headings in this Note are
included for the convenience of reference only and do not constitute a part of
this Note for any other purpose.
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References to sections in this Note are references to the sections of this Note,
unless the context shall require otherwise.
SECTION 11. NON-EXCLUSIVE JURISDICTION. Each of the Company and
the Holder, by acceptance hereof, (1) agrees that any legal action with respect
to this Note may be brought in the courts of the State of Colorado or of the
United States of America for the District of Colorado, (2) accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of those courts, and (3) irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
FORUM NON CONVENIENS, which it may now or hereafter have to the bringing of any
legal action in those jurisdictions; PROVIDED, HOWEVER, that each of the Company
and the Holder may assert in a legal action in any other jurisdiction or venue
each defense, third-party claim or similar claim that, if not so asserted in
such legal action, may thereafter not be asserted by such party in an original
legal action in the courts referred to in clause (1) above.
SECTION 12. WAIVER OF JURY TRIAL. Each of the Company and the
Holder, by acceptance hereof, waives any right to a trial by jury in any legal
action to enforce or defend any right under this Note or any amendment,
instrument, document or agreement delivered, or which in the future may be
delivered, in connection with this Note and agrees that any legal action shall
be tried before a court and not before a jury.
SECTION 13. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under this Note or for any claim based on, in
respect of or by reason of, such obligations or its creation. The Holder by
accepting this Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of this Note.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
INTERNET COMMUNICATIONS CORPORATION
By: /s/ THOMAS C. GALLEY
-----------------------
Name: Thomas C. Galley
Title: President
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EXHIBIT A
[FORM OF CONVERSION NOTICE]
TO INTERNET COMMUNICATIONS CORPORATION
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or portion hereof (which is $1,000 or an integral
multiple thereof) below designated, into shares of Common Stock of the Company
in accordance with the terms of this Note, and directs that the shares issuable
and deliverable upon the conversion, together with any check in payment for
fractional shares and a Note representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect hereto.
Dated: _______________________
_____________________________
<PAGE>
EXHIBIT 3
FORM OF
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of May 29, 1996 between
INTERNET COMMUNICATIONS CORPORATION, a Colorado corporation (the "COMPANY"),
and INTERWEST GROUP, INC., a Colorado corporation (the "STOCKHOLDER").
Terms not otherwise defined herein have the meanings stated in the
Share Exchange Agreement (as defined below).
RECITALS
A. The Company and the Stockholder have executed and delivered
the Share Exchange Agreement dated as of May 29, 1996 (the "SHARE EXCHANGE
AGREEMENT"), pursuant to which, among other things, (1) on the date hereof, the
Stockholder is purchasing the Note from the Company and hereafter may, if the
principal amount of and interest accrued on the Note shall not be paid in full
at the maturity thereof (whether at stated maturity, on the date of any required
prepayment or upon acceleration), acquire the Conversion Shares upon the
conversion of the Note and (2) on the Second Closing Date, if the same shall
occur, the Stockholder will acquire the Additional Shares from the Company. The
Conversion Shares and the Additional Shares are collectively referred to as the
"REGISTRABLE SHARES".
B. The Company and the Stockholder desire to enter into this
Agreement to provide for the registration under the Securities Act of the
disposition of the Registrable Shares and certain other matters.
AGREEMENT
The parties agree as follows:
SECTION 1. REGISTRATION RIGHTS.
(a) From and after second anniversary of the First Closing
Date on one or more occasions when the Company shall have received the written
request of the Stockholder, any pledgee of Registrable Shares from the
Stockholder or holders of at least 100,000 Registrable Shares in the aggregate
(as such number of shares may be adjusted in the event of any change in
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the Registerable Shares by reason of stock dividends, split-ups, reverse
split-ups, mergers, recapitalizations, subdivisions, conversions, exchanges
of shares or the like) that shall have been acquired directly or indirectly
from the Stockholder and to which rights under this Section 1(a) shall have
been assigned pursuant to Section 11(a), in each case in a transaction or
series of transactions not constituting a Rule 144 Transaction (as defined in
Section 1(h)) (each such person, when requesting registration under this
Section 1(a) or under Section 1(b) and thereafter in connection with any such
registration, being hereinafter referred to as a "REGISTERING STOCKHOLDER"),
as expeditiously as practicable the Company shall register not less than
50,000 Registrable Shares (as such number may be adjusted) specified by the
Registering Stockholder in a Registration Statement (as defined in Section
1(h)). If the requested registration pursuant to this Section 1(a) shall
involve an underwritten offering, the Registering Stockholder initiating a
request for registration of Registrable Shares pursuant to this Section 1(a)
shall select (with the consent of the Company, not to be unreasonably
withheld) the managing underwriter in connection with the offering and any
additional investment bankers and managers to be used in connection with the
offering. Notwithstanding anything to the contrary in the foregoing:
(1) the Company shall not be required to prepare and file pursuant
to this Section 1(a) more than five Registration Statements; PROVIDED
that a Registration Statement shall be deemed not to have been prepared
and filed if the same does not become effective; PROVIDED, FURTHER,
that if 10% or more of the Registrable Shares requested to be registered
by the Registering Stockholder initiating a request for registration of
Registrable Shares pursuant to this Section 1(a) are excluded from any
registration in accordance with Section 1(a)(2), there shall be provided
one additional registration under this Section (1)(a)(1) in respect of
each such exclusion; and
(2) if a requested registration pursuant to this Section 1(a)
shall involve an underwritten offering, and if the managing underwriter
shall advise in writing the Company and the Registering Stockholders that,
in its opinion, the number of Registrable Shares of any class proposed to
be included in the registration (including securities of the Company which
are proposed to be offered by persons other than Registering Stockholders)
exceeds the number which would have an adverse effect on the offering,
including the price at which the Registrable Shares can be sold, the
Company will include in the registration the maximum number of securities
which it is so advised can be sold without the adverse effect, allocated
as follows:
(A) FIRST, all Registrable Shares owned by Registering
Stockholders and requested to be included in such registration (if
necessary, allocated pro rata among all Registering Stockholders on
the basis of the relative number of Registrable Shares each such
Registering Stockholder has requested to be included in the
registration); and
(B) SECOND, any other securities proposed to be included
in the registration.
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(b) From and after the first anniversary of the First
Closing Date, if the Company shall determine to register or qualify by a
registration statement filed under the Securities Act and under any applicable
state securities laws, any offering of any Equity Securities of the Company,
whether pursuant to Section 1(a) or otherwise, the Company shall give notice of
such determination to each potential Registering Stockholder and each other
person having rights with respect to the registration under the Securities Act
of the disposition of securities of the Company (each such potential Registering
Stockholder and each such other person, being hereinafter referred to as a
"TRANSACTION REGISTERING STOCKHOLDER") about which the Company has knowledge;
it being understood that without prior notice to the Company, the Company shall
not be deemed to have knowledge of the existence of any pledgee of Registrable
Shares. The Company shall, as expeditiously as possible and in good faith,
include in the registration statement such Registrable Shares (the "TRANSACTION
REGISTRABLE SHARES"), as those persons shall specify by notice received by the
Company not later than 30 days after the giving of the notice by the Company
(each person so notifying the Company being hereinafter referred to as a
"PIGGY-BACK STOCKHOLDER"). Notwithstanding anything in the foregoing to the
contrary,
(1) the Company shall not be required to include any shares owned
by Piggy-Back Stockholders in a registration statement on Form S-4 or S-8
(or any successor form) or a registration statement filed in connection
with an exchange offer or other offering of securities solely to the then
existing shareholders of the Company; and
(2) if a registration pursuant to this Section 1(b) involves an
underwritten offering, the Company shall select the managing underwriter
for the offering and any additional investment bankers and managers to be
used in connection with the offering, and if the managing underwriter
advises the Company in writing that, in its opinion, the number of
securities requested to be included in the registration is so great as
would adversely affect the offering, including the price at which the
Registrable Shares can be sold, the Company will include in the
registration the maximum number of securities which it is so advised can
be sold without the adverse effect, allocated as follows:
(A) FIRST, all securities proposed to be registered by the
Company for its own account;
(B) SECOND, all securities proposed to be registered by
the Company pursuant to the exercise by any person other than a
Registering Stockholder of a right to request the registration of
securities of Common Stock in accordance with an agreement substantially
similar to the provisions of Section 1(a);
(C) THIRD, all Transaction Registrable Shares requested
to be included in the registration under Section 1(b) of this Agreement
(if necessary, allocated pro rata among all requesting Transaction
Registering Stockholders, on the basis of the relative number of
Transaction Registrable Shares, each Transaction Registering
Stockholder has requested to be included in the registration); and
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(D) FOURTH, any other securities proposed to be registered
by the Company other than for its own account, including, without
limitation, securities proposed to be registered by the Company pursuant
to the exercise by any person other than a Registering Stockholder of any
right in accordance with an agreement substantially similar to this
Section 1(b);
PROVIDED, HOWEVER, that in no event will the number of Registrable Shares
included in the Registration pursuant to this Section 1(b)(2) be reduced to less
than 10% of the aggregate number of securities included in the registration.
(c) The Company shall provide each Registering Stockholder,
each underwriter participating in any disposition pursuant to such registration
and their respective representatives reasonable opportunity for due diligence in
connection with each registration of Registrable Shares of the Registering
Stockholder pursuant to this Section 1.
(d) At the request of one or more of the Registering
Stockholders or the Company in connection with any registration pursuant to this
Section 1, the Company and the requesting Registering Stockholders shall enter
into an appropriate underwriting agreement with respect to the Registrable
Shares of the Registering Stockholders containing terms and provisions customary
in agreements of that nature, including provisions with respect to expenses
substantially the same as those set forth in Section 2 and provisions with
respect to indemnification and contribution substantially the same as those set
forth in Section 3.
(e) Notwithstanding anything herein to the contrary, the
Company shall not be required to include in any registration pursuant to this
Section 1 any Registrable Shares owned by a Registering Stockholder (1) if the
Company shall deliver to the Registering Stockholder an opinion, satisfactory in
form, scope and substance to the Registering Stockholder and addressed to the
Registering Stockholder by legal counsel satisfactory to the Registering
Stockholder, to the effect that the distribution of Registrable Shares proposed
by the Registering Stockholder is exempt from registration under the Securities
Act and all applicable state securities laws or (2) if such Registering
Stockholder or any underwriter of Registrable Shares shall fail to furnish to
the Company the information in respect of the distribution of the shares that
may be required under this Agreement to be furnished by the Registering
Stockholder or the underwriter to the Company.
(f) Upon written notice to each Registering Stockholder,
the Company may postpone effecting a registration pursuant to this Section 1
on one occasion during any period of nine consecutive months, may require
other holders of shares registered pursuant to this Section 1 to refrain from
disposing of the shares under the registration or may require Transaction
Registering Stockholders to refrain from otherwise disposing of any shares of
Equity Securities of the Company owned by them (whether pursuant to Rule 144
under the Securities Act or otherwise), in each case for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed), if (1) an investment banking firm of recognized
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national standing shall advise the Company and the Registering Stockholders
in writing that effecting the registration or disposition would materially
and adversely affect an offering of Equity Securities of the Company the
preparation of which had then been commenced or (2) the Company is in
possession of material non-public information the disclosure of which during
the period specified in such notice the Company believes would not be in the
best interests of the Company.
(g) In the event the registration of Registrable Shares
shall be required by this Section 1:
(1) Each Registering Stockholder shall furnish, and shall cause
each underwriter of the Registrable Shares of the Registering Stockholder
to be distributed pursuant to the registration to furnish, to the Company
in writing promptly upon the request of the Company the additional
information regarding the Registering Stockholder or the underwriter, the
contemplated distribution of the Registrable Shares and the other
information regarding the proposed distribution by the Registering
Stockholder and the underwriter that shall be required in connection with
the proposed distribution by the applicable securities laws of the United
States of America and the states thereof in which the Registrable Shares
are contemplated to be distributed. The information furnished by any
Registering Stockholder or any underwriter shall be certified by the
Registering Stockholder or the underwriter, as the case may be, and shall
be stated to be specifically for use in connection with the registration.
(2) The Company shall prepare and file with the Securities and
Exchange Commission the Registration Statement, including the
Prospectus (as defined in Section 1(h)), under the Securities Act and
as required under any applicable state securities laws, on the form
that is then required or available for use by the Company to permit
each Registering Stockholder, upon the effective date of the
Registration Statement, to use the Prospectus in connection with the
contemplated distribution by the Registering Stockholder of the
Registrable Shares so registered. If any Registration Statement refers
to any Registering Stockholder by name or otherwise as the holder of
any securities of the Company, then the Registering Stockholder shall
have the right to require, in the event that such reference to the
Registering Stockholder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the
deletion of the reference to the Registering Stockholder. The Company
shall deliver to each Registering Stockholder, without charge, one
executed copy of the Registration Statement and each amendment or
post-effective amendment thereof and one copy of each document
incorporated therein by reference. If the registration shall have been
initiated solely by the Company or shall not have been initiated by the
Registering Stockholder, the Company shall not be obligated to
prosecute the registration, and may withdraw the Registration Statement
at any time prior to the effectiveness thereof, if the Company shall
determine in good faith not to proceed with the offering of securities
included in the Registration Statement. In all other cases, the
Company shall use its best efforts to cause the Registration Statement
to become
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<PAGE>
effective and, as soon as practicable after the effectiveness thereof,
shall deliver to each Registering Stockholder evidence of the
effectiveness and a reasonable supply of copies of the Prospectus. In
addition, if necessary for resale by the Registering Stockholders, the
Company shall qualify or register in such states as may be reasonably
requested by each Registering Stockholder the Registrable Shares of the
Registering Stockholder that shall have been included in the Registration
Statement; PROVIDED that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation in any state in which it is not subject to process or
qualified as of the date of the request.
(3) The Company shall use its best efforts to cause the
Registration Statement and the Prospectus to remain effective or
current, as the case may be, including the filing of necessary
amendments, post-effective amendments and supplements, and shall
furnish copies of such amendments, post-effective amendments and
supplements to the Registering Stockholders, so as to permit
distributions by the Registering Stockholders during the respective
contemplated periods of distribution, but in no event longer than six
consecutive months from the effective date of the Registration
Statement; PROVIDED that the period shall be increased by the number of
days that any Registering Stockholder shall have been required by
Section 1(f) to refrain from disposing of the Registrable Shares owned
by the Registering Stockholder in the distribution. During such
respective contemplated periods of distribution, the Company shall
comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all Registrable Shares that shall have
been included in the Registration Statement in accordance with the
intended methods of disposition by the Registering Stockholders set
forth in the Registration Statement, the Prospectus or the supplement,
as the case may be. The Company shall not be deemed to have used its
best efforts to cause the Registration Statement to remain effective
during the applicable period if it voluntarily takes any action (other
than an action required under applicable law) that would result in the
Registering Stockholders not being able to dispose of the Registrable
Shares during that period in accordance with the intended methods of
disposition. The Company shall notify each Registering Stockholder, at
any time when a prospectus with respect to the Registrable Shares is
required to be delivered under the Securities Act, when the Company
becomes aware of the happening of any event as a result of which the
Prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein (in the case of the Prospectus or any preliminary
prospectus, in light of the circumstances under which they were made)
not misleading and, as promptly as practicable thereafter, prepare and
file with the Securities and Exchange Commission an amendment or
supplement to the Registration Statement or the Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The Company shall make every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible
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moment. Notwithstanding anything in the foregoing to the contrary, the
Company may at any time upon notice to each Registering Stockholder
terminate the effectiveness of the Registration Statement or upon
notice to any Registering Stockholder withdraw from the Registration
Statement the Registrable Shares of the Registering Stockholder if, in
the opinion of counsel for the Company, there shall have arisen any
legal impediment to the offer of the Registrable Shares made by the
Prospectus or if any legal action or administrative proceeding shall
have been instituted or threatened or any other claim shall have been
made relating to the offer made by the Prospectus or against any of the
parties involved in the offer; PROVIDED that, promptly after those
matters shall be resolved to the satisfaction of counsel for the
Company, pursuant to this Section 1 the Company shall cause the
registration of Registrable Shares formerly covered by the Registration
Statement that were removed from registration by the action of the
Company.
(4) If requested by any Registering Stockholder or an underwriter,
the Company shall as promptly as practicable prepare and file with the
Securities and Exchange Commission an amendment or supplement to the
Registration Statement or the Prospectus containing such information as
the Registering Stockholder or the underwriter requests to be included
therein, including, without limitation, information with respect to the
Registrable Shares being sold by the Registering Stockholder to the
underwriter, the purchase price being paid therefor by such underwriter
and other terms of the underwritten offering of the Registrable Shares to
be sold in such offering.
(5) Each Registering Stockholder shall report to the Company
distributions made by the Registering Stockholder of Registrable Shares
pursuant to the Prospectus and, upon written notice by the Company that an
event has occurred as a result of which an amendment or supplement to the
Registration Statement or the Prospectus is required, the Registering
Stockholder shall cease further distributions pursuant to the Prospectus
until notified by the Company of the effectiveness of the amendment or
supplement. Each Registering Stockholder shall distribute Registrable
Shares only in accordance with the manner of distribution contemplated by
the Prospectus with respect to the Registrable Shares. Each Registering
Stockholder, by participating in a registration pursuant to this Section
1, acknowledges that the remedies of the Company at law for failure by the
Registering Stockholder to comply with the undertaking contained in this
Section 1(g)would be inadequate and that the failure would not be
adequately compensable in damages and would cause irreparable harm to the
Company, and therefore agrees that undertakings made by the Registering
Stockholder in this Section 1(g) may be specifically enforced.
(6) The Company shall deliver to the Registering Stockholders,
their counsel and the underwriters, if any, of Registrable Shares owned by
Registering Stockholders to be distributed pursuant to such registration,
the certificates, opinions of counsel and comfort letters that are
customarily delivered in connection with underwritten public offerings.
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(7) The Company shall cooperate with each Registering Stockholder
and each underwriter to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing
Registrable Shares to be sold under the Registration Statement, and enable
such Registrable Shares to be in such denominations and registered in such
names as the Registering Stockholder or the underwriter may request.
(8) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission, and make available to its securityholders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the
first calendar month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.
(9) The Company shall take all action required to cause the
Registrable Shares to be listed on each national securities exchange on
which the Common Stock shall then be listed, if any, and to be qualified
for inclusion in the National Association of Securities Dealers Automated
Quotation/Small Cap market ("NASDAQ/SMALL CAP").
(h) For the purposes of this Section 1, the following terms
shall have the following meanings:
(1) "REGISTRATION STATEMENT" means a registration statement
filed by the Company in accordance with Section 1(g)(2), including
exhibits and financial statements thereto, in the form in which it shall
become effective and, in the event of any amendment thereto after the
effective date of the registration statement, also means (from and after
the effectiveness of the amendment) the registration statement as so
amended;
(2) "RULE 144 TRANSACTION" means a transaction involving the
sale of Registrable Shares to a person other than an affiliate of the
Company under circumstances in which all of the applicable conditions of
Rule 144 or Rule 144A (or any similar provisions then in force) under the
Securities Act are satisfied; and
(3) "PROSPECTUS" means the prospectus relating to the
Registrable Shares owned by the Registering Stockholders included in a
Registration Statement and, in the event of any amendment or supplement to
the prospectus after the effective date of the Registration Statement,
also means (from and after the effectiveness of the amendment or the
filing with the Securities and Exchange Commission of the supplement) the
prospectus as so amended or supplemented and, if a prospectus relating to
the Registrable Shares shall be filed with the Securities and Exchange
Commission pursuant to Rider 424 under the Securities Act, such
prospectus.
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SECTION 2. EXPENSES.
(a) The Company shall bear all expenses of the following in
connection with the registration of Registrable Shares pursuant to Section 1,
whether or not any related Registration Statement shall become effective:
(1) preparing, printing and filing each Registration Statement and
Prospectus and each qualification or notice required to be filed under
federal and state securities laws or the rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD") in
connection with a registration pursuant to Section 1;
(2) all fees and expenses of complying with federal and state
securities laws and the rules and regulations of the NASD;
(3) furnishing to each Registering Stockholder one executed copy
of the related Registration Statement and the number of copies of the
related Prospectus that may be required by Sections 1(g)(2) and 1(g)(3) to
be so furnished, together with a like number of copies of each amendment,
post-effective amendment or supplement;
(4) performing its obligations under Section 1(g)(6);
(5) printing and issuing share certificates, including the
transfer agent's fees, in connection with each distribution so registered;
and
(6) preparing audited financial statements required by the
Securities Act and the rules and regulations thereunder to be included
in the Registration Statement and preparing audited financial
statements for use in connection with the registration other than
audited financial statements required by the Securities Act and the
rules and regulations thereunder;
(7) internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties);
(8) premiums or other expenses relating to liability insurance
required by the Company or underwriters of the Registering Stockholders;
(9) fees and disbursements of underwriters of the Registering
Stockholders customarily paid by issuers or sellers of securities;
(10) listing of the Registrable Shares on national securities
exchanges and inclusion of the Registrable Shares in NASDAQ/Small Cap; and
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<PAGE>
(11) fees and expenses of any special experts retained by the
Company in connection with the registration.
(b) The Registering Stockholders shall bear all other
expenses incident to the distribution by the respective Registering Stockholders
of their Registrable Shares in connection with a registration pursuant to
Section 1, including without limitation the selling expenses of the Registering
Stockholders, commissions, underwriting discounts, insurance, fees of counsel
for the Registering Stockholders and their underwriters.
SECTION 3. INDEMNIFICATION
(a) The Company shall indemnify and hold harmless each
Registering Stockholder participating in a registration pursuant to Section
1, each underwriter of any of the Registrable Shares owned by the Registering
Stockholder to be distributed pursuant to the registration, each partner in
each Registering Stockholder, the officers and directors of the Registering
Stockholder and the underwriter and each person, if any, who controls the
Registering Stockholder, each partner in each Registering Stockholder or the
underwriter within the meaning of Section 15 (or any successor provision) of
the Securities Act, and their respective successors, against all claims,
losses, damages and liabilities to third parties (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in the Registration Statement or the
Prospectus or other document incident thereto 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 shall reimburse
each such Registering Stockholder and each other person indemnified pursuant
to this Section 3(a) for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action; PROVIDED that the Company shall not be liable in any
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 written
information furnished to the Company by any Registering Stockholder or
underwriter for a Registered Stockholder specifically for use in the
Registration Statement or the Prospectus.
(b) Each Registering Stockholder, by participating in a
registration pursuant to Section 1, thereby agrees to indemnify and to hold
harmless the Company and its officers and directors and each person, if any, who
controls any of them within the meaning of Section 15 (or any successor
provision) of the Securities Act, and their respective successors, against all
claims, losses, damages and liabilities to third parties (or actions in respect
thereof) arising out of or based upon any untrue statement (or alleged untrue
statement) of a material fact contained in the Registration Statement or the
Prospectus or other document incident thereto 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 shall reimburse the
Company and each other person indemnified pursuant to this Section 3(b) for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
PROVIDED that this Section 3(b) shall apply only if (and only to the extent
that)
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<PAGE>
the statement or omission was made in reliance upon and in conformity with
information furnished to the Company in writing by the Registering Stockholder
specifically for use in the Registration Statement or the Prospectus;
PROVIDED, FURTHER, that in no event shall the liability of a Registering
Stockholder hereunder be greater in amount than the dollar amount of the
proceeds received by the Registering Stockholder upon the sale of the
Registrable Shares giving rise to such indemnification obligations.
(c) If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against any person
indemnified under this Section 3, the indemnified person shall promptly notify
the indemnifying party in writing, and the indemnifying party shall assume the
defense of the action or proceeding, including the employment of counsel
satisfactory to the indemnified person and the payment of all expenses. The
indemnified person shall have the right to employ separate counsel in any action
or proceeding and to participate in the defense of the action or proceeding, but
the fees and expenses of that counsel shall be at the expense of the indemnified
person unless
(1) the indemnifying party shall have agreed to pay those fees and
expenses; or
(2) the indemnifying party shall have failed to assume the defense
of the action or proceeding or shall have failed to employ counsel
reasonably satisfactory to the indemnified person in the action or
proceeding; or
(3) the named parties to the action or proceeding (including
any impleaded parties) include both the indemnified person and the
indemnifying party, and the indemnified person shall have been advised
by counsel that there may be one or more legal defenses available to
the indemnified person that are different from or additional to those
available to the indemnifying party (in which case, if the indemnified
person notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of the indemnified person; it being
understood, however, that the indemnifying party shall not, in
connection with any one action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys at any time for the indemnified
person, which firm shall be designated in writing by the indemnified
person).
The indemnifying party shall not be liable for any settlement of any action or
proceeding effected without its written consent, but if settled with its written
consent, or if there be a final judgment for the plaintiff in any such action or
proceedings, the indemnifying party shall indemnify and hold harmless the
indemnified person from and against any loss or liability by reason of the
settlement or judgment.
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(d) If the indemnification provided for in this Section 3 is
unavailable to an indemnified person (other than by reason of exceptions
provided in this Section 3) in respect of losses, claims, damages, liabilities
or expenses referred to in this Section 3, then each applicable indemnifying
party, in lieu of indemnifying the indemnified person, shall contribute to the
amount paid or payable by the indemnified person as a result of the losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified person on the other in connection with the statements or omissions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party on the one hand and of the indemnified person on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified person and by these persons' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 3(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
sentence. The amount paid or payable by a person as a result of the losses,
claims, damages, liabilities and expenses shall be deemed to include any legal
or other fees or expenses reasonably incurred by the person in connection with
investigating or defending any action or claim. Notwithstanding in the
foregoing to the contrary, no Registering Stockholder or underwriter shall be
required to contribute any amount in excess of the amount by which (1) in the
case of any Registering Stockholder, the net proceeds received by the
Registering Stockholder the sale of Registerable Shares or (2) in the case
of an underwriter, the total price at which the Registerable Shares purchased by
it and distributed to the public were offered to the public exceeds, in any such
case, the amount of any damages that the Registering Stockholder or underwriter,
as the case may be, has otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission. No person guilty of fraudulent
representation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.
(e) Each Registering Stockholder participating in a
registration pursuant to Section 1 shall cause each underwriter of any of the
Registrable Shares owned by the Registering Stockholder to be distributed
pursuant to the registration to agree in writing on terms reasonably
satisfactory to the Company to indemnify and to hold harmless the Company and
its officers and directors and each person, if any, who controls any of them
within the meaning of Section 15 (or any successors provision) of the Securities
Act, and their respective successors, against all claims, losses, damages and
liabilities to third parties (or actions in respect thereof) arising out of or
based upon any untrue statement (or alleged untrue statement) of a material fact
contained in the Registration Statement or the Prospectus or other document
incident thereto 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 to reimburse the Company and each other person
indemnified pursuant to the agreement for any legal or any other expense
reasonably
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<PAGE>
incurred in connection with investigating or defending any claim,
loss, damage, liability or action; PROVIDED that the agreement shall apply
only if (and only to the extent that) the statement or omission was made in
reliance upon and in conformity with information furnished to the Company in
writing by the underwriter specifically for use in the Registration Statement or
the Prospectus.
SECTION 4. TRANSFER RESTRICTIONS.
(a) The Stockholder acknowledges that the Company will issue
and sell the Shares in reliance upon the exemption afforded by Section 4(2) of
the Securities Act for transactions by an issuer not involving any public
offering. The Stockholder represents that (1) it will acquire the Registrable
Shares for investment and without any view toward distribution of any of the
shares to any other person, (2) it will not sell or otherwise dispose of the
Registrable Shares except in compliance with the registration requirements or
exemption provisions under the Securities Act.
(b) Except as provided to the contrary in this Section 4,
each certificate for Registrable Shares, and any certificate issued in exchange
therefor or upon conversion, exchange or transfer thereof, shall bear legends to
the effect stated in clauses (1) and (2) below:
(1) "The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be offered, sold,
transferred or otherwise disposed of except in compliance with said Act."
(2) "The shares represented by this certificate are subject to the
restrictions contained in the Registration Rights Agreement dated as of
May 29, 1995, a copy of which is on file at the office of the Secretary of
the Company."
(c) The legend stated in Section 4(b)(1) shall be removed by
delivery of one or more substitute certificates without such legend if either
(1) the related certificates are issued in connection with a sale registered
under the Securities Act or (2) the holder thereof shall have delivered to the
Company a copy of a letter from the staff of the Securities and Exchange
Commission or an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that the legend is not required for
purposes of the Securities Act.
(d) The legend stated in Section 4(b)(2) shall be removed by
delivery of one or more substitute certificates without such legend at such time
as the related securities are no longer subject to this Agreement.
SECTION 5. FILINGS. The Company shall make all filings with the
Securities and Exchange Commission required in order to make available to the
holders of Registrable Shares the exemption from the registration requirements
provided by Rule 144 (or any successor regulation) under the Securities Act.
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SECTION 6. MERGER, CONSOLIDATION, EXCHANGE, ETC. In the event,
directly or indirectly, (1) the Company shall merge with and into, or
consolidate with, or consummate a share exchange pursuant to the Colorado
Business Corporation Act (or successor provisions or statutes) with, any other
person, or (2) any person shall merge with and into, or consolidate, the Company
and the Company shall be the surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation, all or part
of the Registrable Shares shall be changed into or exchanged for stock or other
securities of any other person, then, in each such case, proper provision shall
be made so that such other person shall be bound by the provisions of this
Agreement and the term "Company" shall thereafter be deemed to refer to such
other person.
SECTION 7. OTHER AGREEMENTS.
(a) The Company, on behalf of itself and its Affiliates
(other than a Registering Stockholder), agrees (1) not to effect any public sale
or distribution of any securities similar to the Registrable Shares being
registered pursuant to this Agreement or any securities convertible into or
exchangeable or exercisable for such Registrable Shares during the 14 days prior
to, and during the 90-day period beginning on, the effective date of the
Registration Statement (except (x) on Form S-4 or Form S-8 (or comparable form)
or (y) as part of the Registration Statement; PROVIDED that with respect to
clause (y) in the case of a registration pursuant to Section 1(a) the
Registering Stockholder initiating the registration consents to such inclusion),
or the commencement of a public distribution of Registrable Shares; (2) not to
enter into any agreement inconsistent with any provision of this Agreement; (3)
that any agreement entered into after the date of this Agreement pursuant to
which the Company issues or agrees to issue any privately placed securities
shall contain a provision under which holders of such securities agree not to
effect any public sale or distribution of any of the securities during the
periods described in clause (1) of this Section 7(a), in each case including a
sale in a Rule 144 Transaction (except as part of any such registration, if
permitted); PROVIDED that the provisions of this Section 7(a) shall not
prevent the conversion or exchange of any securities pursuant to their terms
into or for other securities.
(b) If and to the extent requested by the Company in the
case of a non-underwritten public offering and if and to the extent requested by
the managing underwriter in the case of an underwritten public offering, the
Registering Stockholder agrees not to effect any public sale or distribution of
any securities similar to the securities being registered or any securities
convertible into or exchangeable or exercisable for such securities during the
14 days prior to, and during the 90-day period beginning on, the effective date
of such registration statement (except as part of such registration agreement).
SECTION 8. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in writing.
Communications may be made by telecopy or similar writing. Each communication
shall be given to the party at its address stated on the signature pages of this
Agreement or at any other address as the party may specify for this purpose by
notice
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to the other party. Each communication shall be effective (1) if given
by telecopy, when the telecopy is transmitted to the proper address and the
receipt of the transmission is confirmed, (2) if given by mail, 72 hours after
the communication is deposited in the mails properly addressed with first class
postage prepaid or (3) if given by any other means, when delivered to the proper
address and a written acknowledgement of delivery is received.
SECTION 9. NO WAIVERS; REMEDIES. No failure or delay by any
party in exercising any right, power or privilege under this Agreement shall
operate as a waiver of the right, power or privilege. A single or partial
exercise of any right, power or privilege shall not preclude any other or
further exercise of the right, power or privilege or the exercise of any other
right, power or privilege. The rights and remedies provided in this Agreement
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10. AMENDMENTS, ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by a party to this Agreement from any provision of this Agreement,
shall be effective unless it shall be in writing and signed and delivered by the
other party to this Agreement, and then it shall be effective only in the
specific instance and for the specific purpose for which it is given.
SECTION 11. SUCCESSORS AND ASSIGNS.
(a) The Stockholder may assign to any transferee of any
principal amount of the Parent Note or Registrable Shares its rights and
delegate its obligations under this Agreement; provided that such transferee
assignee shall accept those rights and assume those obligations for the benefit
of the Company in writing in form reasonably satisfactory to the Company.
Thereafter, without any further action by any person, all references in this
Agreement to the "Stockholder", and all comparable references, shall be deemed
to be references to the transferee, and the Stockholder shall be released from
any obligation or liability under this Agreement with respect to the Registrable
Shares so transferred.
(b) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns pursuant to Section 11(a).
SECTION 12. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Colorado.
All rights and obligations of the Company and the Stockholder shall be in
addition to and not in limitation of those provided by applicable law.
SECTION 13. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if all signatures were on the same instrument.
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SECTION 14. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of the provision in any other
jurisdiction.
SECTION 15. HEADINGS AND REFERENCES. Section headings in this
Agreement are included for the convenience of reference only and do not
constitute a part of this Agreement for any other purpose. References to
parties and sections in this Agreement are references to the parties to or the
sections of this Agreement, as the case may be, unless the context shall require
otherwise.
SECTION 16. ENTIRE AGREEMENT. Except as otherwise specifically
provided in the following sentence, the Transaction Documents embody the entire
agreement and understanding of the respective parties and supersede all prior
agreements or understandings with respect to the subject matters of those
documents.
SECTION 17. SURVIVAL. Except as otherwise specifically provided
in this Agreement, each representation, warranty or covenant of each party to
this Agreement contained in or made pursuant to this Agreement shall survive
the Closing and remain in full force and effect, notwithstanding any
investigation or notice to the contrary or any waiver by any other party of a
related condition precedent to the performance by the other party of an
obligation under this Agreement.
SECTION 18. NON-EXCLUSIVE JURISDICTION. Each party (1) agrees
that any Action with respect to this Agreement may be brought in the courts of
the State of Colorado or of the United States of America for the District of
Colorado, (2) accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of those courts and (3) irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of FORUM NON CONVENIENS, which it may now or
hereafter have to the bringing of any Action in those jurisdictions.
SECTION 19. WAIVER OF JURY TRIAL. Each party waives any right
to a trial by jury in any Action to enforce or defend any right under this
Agreement or any amendment, instrument, document or agreement delivered, or
which in the future may be delivered, in connection with this Agreement and
agrees that any Action shall be tried before a court and not before a jury.
SECTION 20. AFFILIATE. Nothing contained in this Agreement
shall constitute the Stockholder an "affiliate" of any of the Company and its
Subsidiaries within the meaning of Rule 13e-3 under the Exchange Act.
____________________________
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IN WITNESS WHEREOF, the parties have executed and delivered this
Registration Rights Agreement as of the date first written above in Denver,
Colorado.
INTERNET COMMUNICATIONS CORPORATION
By: /s/ THOMAS C. GALLEY
--------------------------
Name: Thomas C. Galley
Title: President
Address: 7100 East Belleview Avenue
Suite 201
Englewood, Colorado 80111
Telecopy: (303) 770-0588
INTERWEST GROUP, INC.
By: /s/ J.E. Shamas
-------------------------------
Name: J.E. Shamas
Title: President
Address: 12201 East Arapahoe Road
Suite C10
Englewood, Colorado 80112
Telecopy: (303) 792-0227
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EXHIBIT 4
AGREEMENT RE JOINT FILING
Each of the undersigned hereby agrees, as required pursuant to Rule
13d-1(f)(1)(iii) under the Securities and Exchange Act of 1934, that this
Schedule 13D is to be filed on behalf of each such party.
INTERWEST GROUP, INC.
By: /s/ THOMAS G. KUNDERT
--------------------------------
Name: Thomas G. Kundert
Title: Treasurer
ANSCHUTZ COMPANY
By: /s/ PHILIP F. ANSCHUTZ
--------------------------------
Name: Philip F. Anschutz
Title: President
PHILIP F. ANSCHUTZ
/s/ PHILIP F. ANSCHUTZ
-----------------------------------
1
