Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
December 10, 1999, by and between LOG ON AMERICA, INC., a Delaware corporation
(the "Company"), and Nortel Networks Inc. (the "Holder").
WHEREAS, pursuant to the Investment Agreement, dated as of the date
hereof, between the Company, and the Holder, the Holder has been issued 256,410
shares of the common stock $.01 par value (the "Common Stock") of the Company;
WHEREAS, the Company has agreed to register the sale of the Common
Stock under the Securities Act of 1933, as amended.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms; Effectiveness of Registration Rights.
1.1 Defined Terms. Capitalized terms used and not defined herein
shall have the respective meanings ascribed to them in the Investment Agreement.
In addition, the following terms shall have the following meanings:
"Governmental Body" means any federal, state, municipal or other
governmental body, department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Inspectors" has the meaning attributed thereto in Section 5.
"Other Holders" means all holders of common stock other than Nortel
Networks Inc.
"Other Securities" has the meaning attributed thereto in Section
3.1.
"Person" means any individual, corporation, partnership, joint
venture, association, trust, unincorporated organization, business or other
legal entity.
"Records" has the meaning attributed thereto in Section 5.
"Registrable Securities" means: (i) the shares of Common Stock of
the Company issued or issuable to the Holder pursuant to the terms of the
Investment Agreement and (ii) any securities of the Company distributed with
respect to such shares of Common Stock.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with the registration and other requirements set
forth in this Registration Rights Agreement including, without limitation, the
following: (i) the fees, disbursements and expenses of all counsel to the
Company and all accountants in connection with the registration statement, any
preliminary prospectus or final prospectus, any other offering documents and
amendments and supplements thereto and the mailing and delivery of copies
thereof to underwriters and dealers; (ii) all expenses in connection with the
preparation, printing and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivery of copies thereof to
underwriters and dealers; (iii) the cost of printing or producing any
agreement(s) among underwriters, underwriting agreement(s) and blue sky or legal
investment memoranda, any selling agreements and any other documents in
connection with the offering, sale or delivery of the Registrable Securities to
be disposed of; (iv) all expenses in connection with the qualification of the
Registrable Securities to be disposed of for offering and sale under state
securities laws, including the fees and disbursements of counsel for the
underwriters in connection with such qualification and in connection with any
blue sky and legal investment surveys; (v) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Registrable Securities to be disposed of; (vi) the
cost and charges of any transfer agent or registrar in connection with the
registration of exchange or transfer of the Registrable Securities to be
disposed of; and (vii) all stock exchange listing fees.
"Total Number of Includible Securities" has the meaning attributed
thereto in Section 3.1(b).
1.2 Effectiveness of Registration Rights. The registration rights
pursuant to Sections 2 and 3 hereof shall become effective upon the date hereof
and shall continue so long as any Holder or transferee of a Holder shall hold
Registrable Securities.
1.3 Registration Not Required. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to effect any registration
pursuant to Section 2.1 or Section 3.1 hereof or to keep effective any
registration statement prepared and filed pursuant to Section 2.1 or Section 3.1
hereof, if, in the written opinion of counsel to the Company who shall be
reasonably satisfactory to the Holder or Holders intending to participate in
such registration and which opinion shall be concurred in by counsel to such
Holders, the intended method or methods of disposition of any Registrable
Securities by such Holders may be effected without registration under the
Securities Act of 1933, as amended and the rules and regulations promulgated
thereunder (the "Securities Act") and without restriction as to subsequent
trading.
Section 2. Registration on Request.
2.1 Notice. Upon written notice from the Holder requesting that the
Company effect the registration under the Securities Act of all or a portion of
the Registrable Securities beneficially owned by it, which notice shall specify
the intended method or methods of disposition of such Registrable Securities,
the Company shall use its best efforts to effect the registration as promptly as
practicable and without restriction as to subsequent trading, under the
Securities Act, of such Registrable Securities for disposition stated in the
request for registration received from the Holder : The Company shall be
obligated to register the Registrable Securities pursuant to this
2
Section 2.1 on two (2) occasions only with respect to notices delivered by the
Holder to the Company requesting such registration.
2.2 Registration Expenses. The Company shall pay or cause to be paid
all Registration Expenses in connection with the exercise of registration rights
pursuant to this Section 2; provided however the Holder shall bear or pay its
pro rata share of underwriting discounts and commissions based on the number of
Registered Securities sold by the Holder.
Section 3. Piggyback Registration.
3.1 Notice and Registration. If the Company proposes to register any
of its voting securities ("Other Securities") for public sale under the
Securities Act, on a form and in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities Act, it will
give prompt written notice to the Holder of its intention to do so, and upon the
written request of the Holder, delivered to the Company within 10 business days
after the giving of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by the Holder, and the intended method of
disposition thereof), the Company will use its best efforts to effect, in
connection with the registration of the Other Securities, the registration under
the Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holder, to the extent required to permit the
disposition (in accordance with the intended method or methods thereof as
aforesaid) of the Registrable Securities so to be registered, provided that:
(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason
not to register the Other Securities, the Company may, at its
election, give written notice of such determination to the Holder,
and thereupon the Company shall be relieved of its obligations to
register such Registrable Securities in connection with the
registration of such Other Securities (but not from its obligation
to pay Registration Expenses to the extent incurred in connection
therewith as provided in Section 3.2), without prejudice, however,
to the rights, if any, of the Holder immediately to request that
such registration be effected as a registration under Section 2;
(b) the Company will not be required to effect any
registration of Registrable Securities under this Section 3 if, and
to the extent that, the underwriters (or any managing underwriter)
shall advise the Company in writing that, in their reasonable
opinion, inclusion of such number of shares of Registrable
Securities will adversely affect the price or distribution of the
securities to be offered solely for the
3
account of the Company. Such advice shall include a statement as to
the underwriters' (or any managing underwriter's) opinion as to the
number of shares which may be included without adversely affecting
the price or distribution of the securities solely for the account
of the Company (such total number of shares which such advice states
may be so included being the "Total Number of Includible
Securities"). The Company shall promptly furnish each Holder with a
copy of such written advice, and in such event the number of shares
as to which the underwriter believes may be sold shall first be
allocated to the Company and the remaining number of shares shall
then be allocated to the Holder.
(c) The Company shall not be required to effect any
registration of Registrable Securities under this Section 3
incidental to the registration of any of its securities in
connection with mergers, acquisitions, exchange offers, dividend
reinvestment plans or stock option or other employee benefit plans.
No registration of Registrable Securities effected under this Section 3 shall
relieve the Company of its obligation, if any, to effect the registration of
Registrable Securities pursuant to Section 2.
3.2 Registration Expenses. The Company will pay all Registration
Expenses in connection with any registration pursuant to this Section 3;
provided that with respect to any such registration, the Holder shall bear any
transfer taxes applicable to its Registrable Securities registered thereunder,
its pro rata share of all underwriting fees, commissions, discounts or other
compensation in respect of such Registrable Securities; and provided, further,
that in no event shall the Holder be required to pay any internal costs of the
Company.
Section 4. Registration Procedures.
4.1 Registration and Qualification.
(a) If and whenever the Company is required to use its best efforts
to effect the registration of any Registrable Securities under the Securities
Act as provided in Sections 2 and 3, the Company will promptly as is
practicable:
(i) prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act
regarding the Registrable Securities to be offered;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
4
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all
Registrable Securities until such time as all of such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the Holder, as set forth in such
registration statement;
(iii) furnish to the Holder and to any underwriter of such
Registrable Securities such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in the case of the Holder or any managing underwriter,
including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and any summary prospectus) or filed under the Securities
Act, in conformity with the requirements of the Securities Act, such
documents as may be incorporated by reference in such registration
statement, or prospectus, and such other documents, as the Holder or
such underwriter may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as the
Holder or any underwriter of such Registrable Securities shall
reasonably request, and do any and all other acts and things which
may be necessary or advisable to enable the Holder or any
underwriter to consummate the disposition in such jurisdictions of
its Registrable Securities covered by such registration statement,
except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to consent to general service
of process in any such jurisdiction;
(v) in the case of any underwritten offering, furnish to the
Holder and the underwriters, addressed to them, (A) an opinion of
counsel for the Company, dated the date of the closing under the
underwriting agreement relating to any underwritten offering, in
form and substance satisfactory to the Holder, to the effect that
(a) a registration statement covering the Registrable Securities has
been filed with the Commission under the Securities Act and has been
made effective by order of the Commission, (b) such registration
statement and the prospectus contained therein comply in all
material respects with the requirements of the Securities Act, and
nothing has come to said counsel's attention which would cause it to
believe that
5
either such registration statement or the prospectus contains any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they
were made not misleading, (c) a prospectus meeting the requirements
of the Securities Act is available for delivery, (d) no stop order
has been issued by the Commission suspending the effectiveness of
such registration statement and, to the best of counsel's knowledge,
no proceedings for the issuance of such a stop order are threatened
or contemplated, and (e) there has been compliance with the
applicable provisions of the securities or blue sky laws of each
jurisdiction in which the Company shall be required pursuant to
clause (iv) of this sentence to register or qualify such Registrable
Securities, assuming the accuracy and completeness of the
information furnished to such counsel with respect to each filing
relating to such laws, and (B) a comfort letter signed by the
independent public accountants who have certified the Company's
financial statements included in such registration statement, with
respect to events subsequent to the date of such financial
statement, as are customarily covered in accountants' letters,
delivered to underwriters in underwritten public offerings of
securities and such other matters as the Holders may reasonably
request;
(vi) at the expense of the Holder, give the Holder, any
underwriter(s), and one counsel or firm of counsel and one
accountant or firm of accountants representing the Holder the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC,
and each amendment thereof or supplement thereto; and
(vii) immediately notify the Holder at any time when a
prospectus relating to a registration pursuant to Section 2 or 3 is
or was required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes or
included an untrue statement of a material fact or omits or omitted
to state any material fact required to be stated therein or
necessary, in the light of the circumstances then existing, to make
the statements therein not misleading, and at the request of the
Holder prepare and furnish to the Holder a reasonable number of
copies of a supplement of or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an
untrue statement of a material
6
fact or omit to state a material fact required to be stated therein
or necessary, in light of the circumstances then existing, to make
the statements therein not misleading; and
(viii) use reasonable efforts to do any and all other acts the
Holder may reasonably request and which are customary for a
registration of equity securities.
The Company may require the Holder to furnish such information regarding such
Holder and the distribution of such securities as the Company may from time to
time reasonably request in writing and as shall be required by law or by the
Commission in connection with any registration.
(b) The Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4.1(a)(vi) hereof, the Holder shall use its best efforts to discontinue
forthwith disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until the Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
4.1(a)(vi) hereof.
4.2 Underwriting.
(a) If requested by the managing underwriter for any underwritten
offering of Registrable Securities pursuant to a registration requested
hereunder, the Company will enter into an underwriting agreement with the
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect provided in Section 6 hereof and the provision of opinions of counsel
and accountants' letters to the effect provided in Section 4.1(a)(v) hereof.
Each Holder participating in the registration, as appropriate, shall be a party
to any such underwriting agreement and the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters, shall also be made to and for the benefit of such Holders.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may require
the Registrable Securities requested to be registered pursuant to Section 3 by
any Holder to be included in such underwriting on the same terms and conditions
as shall be applicable to the Other Securities being sold through underwriters
under such registration. In any such case, the Holder shall be party to any such
underwriting agreement. Such agreements shall contain such representations,
warranties and covenants by the Holder, as appropriate, and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect provided in Section 6 hereof. The representations and
warranties in such underwriting agreement by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters, shall also be
made for the benefit of the Holder.
7
Section 5. Preparation: Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act, the Company will give the
Holder participating in the registration and the underwriters, if any, and their
respective counsel and accountants (collectively, the "Inspectors"), such
reasonable and customary access to its books and records (collectively, the
"Records") and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holder and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. Records which the
Company reasonably determines to be confidential and which it notifies the
Inspectors in writing are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary or appropriate to avoid
or correct a misstatement or omission in the registration statement, (ii) the
portion of the Records to be disclosed has otherwise become publicly known,
(iii) the information in such Records is to be used in connection with any
litigation or governmental investigation or hearing relating to any registration
statement or (iv) the release of such Records is ordered pursuant to a subpoena
or other order. Each Holder agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company.
Section 6. Indemnification and Contribution.
(a) Indemnification By the Company. The Company agrees to
indemnify and hold harmless each Person who participates as an underwriter, the
Holder participating in a registration pursuant to this Agreement, each of their
respective officers and directors and each Person, if any, who controls any such
underwriter or such Holder within the meaning of Section 15 of the Securities
Act as follows:
(i) against any and all loss, claim, damage and expense
whatsoever, as incurred, arising out of or caused by any untrue
statement or alleged untrue statement of a material fact contained
in any registration statement (or any amendment thereto) pursuant to
which Registrable Securities were registered under the Securities
Act, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary or final prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
8
amount paid in settlement of any litigation, or investigation or
proceeding by any Governmental Body commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including fees and disbursements of counsel chosen by the Holders
or any underwriter), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding
by any Governmental Body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under clause (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of or caused by
any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Holder for use in a registration statement (or any amendment
thereto) or any prospectus (or any amendment or supplement thereto); and further
provided that this indemnity agreement does not apply to any loss, liability,
claim, damage or expense arising out of or caused by the Holder's continued
circulation, subsequent to the Holder's receipt of the notice described in
Section 4.1(a)(v) hereof, of a prospectus including the untrue statement of a
material fact or omission of a material fact as to which such notice was
provided.
(b) Indemnification by the Holder. The Holder agrees with respect to
each registration pursuant to this Agreement in which the Holder participates to
indemnify and hold harmless the Company and any underwriter, and each of their
respective directors and officers (including each officer of the Company who
signed the registration statement), and each Person, if any, who controls the
Company or any underwriter within the meaning of Section 15 of the Securities
Act and the Holder, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 6(a) hereof, as
incurred, with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the registration statement (or any amendment
thereto) or any preliminary or final prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Holder expressly for use in the registration statement or
such prospectus (or any amendment or supplement thereto); provided, however that
the Holder shall be liable under this paragraph for only that amount of losses,
claims, damages, and liabilities as does not exceed the proceeds to the Holder
as a result of the sale of Registerable Securities pursuant to such
registration.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party
9
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties which may
be represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 6.
(d) If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section 6
shall survive the completion of any offering of Registrable Securities by the
Holder and otherwise.
Section 7. Transferability of Shares.
10
(a) The shares of any Common Stock distributed to the Holder
pursuant to the Investment Agreement shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Section 7, which conditions
are intended to ensure compliance with the provisions of the Securities Act.
Each certificate representing Registrable Securities held by the Holder shall
(unless otherwise permitted by the provisions of Section 7(b)) be stamped or
otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT). SUCH SHARES MAY NOT BE
SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF THE ACT, OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
(b) The Holder understands that, so long as the legend is required
to be imprinted on a certificate representing Registrable Securities, the
Company may maintain appropriate "stop transfer" orders with respect to such
Registrable Securities on its books and records and with those to whom it may
designate registrar and transfer functions.
(c) The Holder agrees to comply in all respects with the provisions
of this Section 7(c). Prior to any proposed sale, assignment, transfer or pledge
(a "Transfer"), of any Registrable Securities, unless there is in effect a
Registration Statement covering the proposed Transfer, the Holder shall give
written notice to the Company of its intention to effect such Transfer and the
name of the proposed transferee. Each such notice shall describe the manner and
circumstances of the proposed Transfer in sufficient detail, and, if requested
by the Company, shall be accompanied, at the Holder's expense, by either (i) an
unqualified written opinion of legal counsel who shall be, and whose legal
opinion shall be, reasonably satisfactory to the Company addressed to the
Company, to the effect that the proposed Transfer of the Registrable Securities
may be effected without registration under the Securities Act; provided however
that if the proposed Transfer would, in the opinion of such counsel, require
that the Company take action and/or execute and file with the Commission and/or
deliver to the Holder or any other person any form or document in order to
establish the entitlement of the Holder to take advantage of such method of
disposition, the Company agrees promptly to take any such action and/or execute
and file and/or deliver any such form or document, or (ii) a "no action" letter
from the Commission to the effect that the Transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the Holder of such
Registrable Securities shall be entitled to effectuate a Transfer of such
Registrable Securities in accordance with the terms of the notice delivered by
the Holder to the Company. Notwithstanding the foregoing, it is agreed that the
Company will not request an opinion of counsel for the Holder with respect to
Transfers made in reliance on Rule 144 under the Act , the existence of which
shall be determined in good faith by the Board of Directors of the Company;
however, the Holder shall deliver to the Company (i) copies of
11
all forms customarily delivered or deliverable to brokers in connection with a
Transfer of securities, and (ii) a certificate of the Holder desiring to
Transfer such Registrable Securities containing such representations and
warranties to the Company as are customarily given to brokers in connection with
the Transfer of securities.
(d) Each certificate evidencing the Restricted Securities with
respect to which a Transfer as provided in this Section 7 has been effected,
shall bear, except if such Transfer is made pursuant to Rule 144 under the Act,
the appropriate restrictive legend set forth above, except that such certificate
shall not bear such restrictive legend if in the opinion of counsel for the
Holder and the Company such legend is not required in order to establish
compliance with any provision of the Act.
(e) At any time when the Holder desires to make sales of any
Registrable Securities in reliance on Rule 144 promulgated under the Securities
Act, the Company covenants and agrees that either there will be available
adequate current public information with respect to the Company as required by
paragraph (c) of said Rule 144 or the Company will use its best efforts to make
such information available without delay if such information is not available.
Without limiting the foregoing, the Company will timely file with the Commission
all reports required to be filed under Section 13 and 15(d) of the Securities
Exchange Act of 1934, as amended, and will promptly furnish to Holder so
requesting a written statement that the Company has complied with all such
reporting requirements.
(f) The Holder may assign its rights hereunder in connection with
any sale, assignment, transfer or pledge of Registrable Securities provided that
such assignee shall have agreed in writing, satisfactory in form and substance
to the Company and its counsel, to be bound hereby. From and after any such
assignment pursuant to this Section 7, references herein to the Holder shall
include such permitted assignee or assignees.
8. Rights Which May Be Granted to Subsequent Investors.
(a) Within the limitations prescribed by this Section 8(a), but not
otherwise, the Company may grant to subsequent investors in the Company rights
of piggyback registration (such as those provided in Section 3 hereof). Such
rights may only pertain to shares of Common Stock, including shares of Common
Stock into which any other securities may be converted. Such rights may be
granted with respect to (i) registrations actually requested by the Holder
pursuant to Section 2 hereof, but only in respect of that portion of any such
registration as remains after inclusion of all Registrable Securities requested
by Holder and (ii) registrations initiated by the Company, but only in respect
of that portion of such registration as is available under the limitations set
forth in Section 3.1(b) hereof (which limitations shall apply pro rata to the
Holders and all other persons participating in the registration) and such rights
shall be limited in all cases to sharing pro rata in the available portion of
the registration in question with Holder, such sharing to be based on the number
of shares of Common Stock held by the Holder and held by such other investors,
plus the number of shares of Common Stock into which other securities held by
such other investors are convertible,
12
which are entitled to registration rights. With respect to registrations which
are for underwritten public offerings, "available portion" means the portion of
the underwritten shares which is available as specified in clauses (i) and (ii)
of the third sentence of this Section 8(a). Shares not included in such
underwriting shall not be registered.
(b) The Company may not grant to subsequent investors in the Company
rights of registration upon request (such as those provided in Section 2 hereof)
unless (i) such rights are limited to shares of Common Stock issued by the
Company to such investors or to shares of Common Stock issuable by the Company
upon the conversion of other securities issued by the Company to such investors,
(ii) such rights shall not become effective in the period commencing with the
effective date and for thirty (30) days after the effective date of the
registration pursuant to Section 2 hereof and (iii) such rights shall not be
more favorable than those granted to the Holder.
Section 9. Miscellaneous.
9.1 Severability. If any term, provision, covenant, restriction,
part or portion of this Agreement is held by a court of competent jurisdiction
to be invalid, void or unenforceable, or is otherwise legally impossible to
perform, the remainder of the terms, provisions, covenants, restrictions, parts
and portions of this Agreement shall remain in full force and effect.
9.2 Specific Enforcement. The parties hereto acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to specific performance of any covenant in this Agreement or an
injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement, this being in addition to any other remedy to which they may be
entitled by law or equity.
9.3 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the matters covered hereby and this
Agreement may be amended only by an agreement in writing executed by the parties
hereto.
9.4 Counterparts. This Agreement may be executed in by the parties
hereto in counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
9.5 Notices. All notices and other communications provided for
herein (including, without limitation, any waivers or consents under this
Agreement) shall be given or made by telecopy, telegraph, cable or otherwise in
writing (each communication given by any of such means to be deemed to be "in
writing" for purposes of this Agreement) and telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at the address for notices
specified below or, as to any party, at such other address as shall be
designated by such party in a notice to the other. Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been duly
given (i) when delivered to the telegraph or cable office or personally
delivered or, (ii) in the case of
13
transmission by telecopy, when telecopied (with confirmation) and mailed (with
same day post-mark) certified mail, return receipt requested or (iii) in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
if to the Company: Log On America, Inc.
3 Regency Plaza
Providence, Rhode Island 02903
Attn: David Paolo, President
Fax No. 401- 459-6277
with a copy to: Silverman, Collura, Chernis & Balzano, P,C.
381 Park Avenue South Suite 1601
New York, NY 10016
Attn: Peter Silverman
Fax No. 212-779-8858
If to Investor to: Nortel Networks Inc.
GM5991 15 A40
2221 Lakeside Blvd.
Richardson, TX 75082-4399
Attn: Paul D. Day, Vice President Customer Finance
Fax No. 972-684-3679
9.6 Waivers. Each party may waive in whole or in part any benefit
or right provided to it under this Agreement. No waiver by any party of any
default with respect to any provision, condition, requirement, or of any benefit
or right hereof shall be deemed to be a waiver of any other provision,
condition, requirement, benefit or right hereof; nor shall any delay or omission
of either party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter.
9.7 Submission to Jurisdiction . Any action with respect to any
claim arising out of or relating to this Agreement including any claim for
specific performance arising under Section 9.2 hereof may be brought in the
State, City and County of New York, and in furtherance thereof (a) each of the
Company and the Holder irrevocably consents and submits to the non-exclusive
jurisdiction of the Supreme Court of the State of New York for the County of New
York and the United State District Court for the Southern District of New York
and (b) each of the Company and the Holder irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any such
court, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum and further
irrevocably waives the right to object, with respect to such suit, action or
proceedings brought in any such court, that such court does not have
jurisdiction over such party.
14
9.8 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
9.9 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company and the Holders, and their successors
and legal representatives. No rights to the benefit of any third parties are
intended to be created by any provision of this Agreement or any rights
hereunder except to the extent contemplated by Section 7 hereof.
9.10 Governing Law. This Agreement was negotiated and delivered in
the State of New York. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state.
9.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Execution and delivery of
this Agreement by exchange of facsimile copies bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and delivery of
this Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officer as of the date set forth
at the head of this Registration Rights Agreement.
LOG ON AMERICA, INC.
By: /David Paolo
----------------------------
Name: David Paolo
Title: President
NORTEL NETWORKS INC.
By:
----------------------------
Paul D. Day,
VP, Customer Finance
15