EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the 6th day of
May, 1999, by and among ZipLink, LLC, ("ZipLink") having a usual place of
business at 40 Woodland Street, Hartford, Connecticut 06105, and Williams
Communications, Inc., having a usual place of business at One Williams Center,
Suite 4100, Tulsa, Oklahoma 74172 ("Williams").
RECITALS
WHEREAS, Williams is purchasing certain units of ownership of ZipLink
pursuant to a certain Securities Purchase Agreement of even date herewith (the
"Purchase Agreement"); and
WHEREAS, pursuant to the Purchase Agreement, ZipLink has agreed to
provide Williams the registration rights set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Agreement:
(a) "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the
Securities Act.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and
regulations thereunder, all as the same shall be in effect at
the time.
(c) "Holder" means Williams or anyone who holds Registrable
Securities to whom the registration rights conferred by this
Section 1 have been transferred in compliance with Section
1.7.
(d) "Participating Holders" means any Holder or Holders who have,
by proper notice, requested inclusion of their Registrable
Securities in the relevant public offering and who have, if
applicable, agreed to participate in any related underwriting.
(e) "Register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities
Act and the declaration or ordering of effectiveness of such
registration statement.
(f) "Registrable Securities" means any and all units of ownership
interest issued to Williams under the Purchase Agreement
(whether held by Williams or any transferee of Williams or any
other Holder pursuant to Section 1.7 hereof), any and all
shares of capital stock issued or exchanged in consequence of
an Incorporation Transaction (as defined in ZipLink's
Operating Agreement dated as of November 21, 1995), as it may
be amended or supplemented, and any and all securities issued
or exchanged, as the case may be, in respect of any of the
foregoing securities as a result of a split or dividend of a
security, or a reorganization, recapitalization or similar
transaction.
(g) "Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations
thereunder, all as the same shall be in effect at the time.
1.2 PIGGY-BACK REGISTRATION.
(a) Whenever ZipLink proposes to register any of its securities
under the Securities Act for its own account or for any of its
shareholders (other than its initial public offering or a
registration on Form S-4 or S-8 or any successor or similar
forms) and the registration form to be used may be used for
the registration of Registrable Securities (a "Piggy-back
Registration"), ZipLink will give prompt written notice to all
Holders of Registrable Securities of its intention to effect
such a registration (which notice shall include a list of
jurisdictions in which ZipLink intends to attempt to qualify
such securities under applicable blue sky or other state
securities laws) and will include in such registration and in
any underwriting involved therein all Registrable Securities
with respect to which ZipLink has received written requests
for inclusion therein within 15 days after the date of the
notice of the Holders.
(b) If a Piggy-back Registration includes an underwriting on
behalf of ZipLink or the parties initiating such registration,
ZipLink shall so advise the Holders as a part of the notice
given pursuant to Section 1.2(a). In such event, the right of
any Holder to registration pursuant to Section 1.2(a) shall be
conditioned on such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent provided herein.
ZipLink and the Holders proposing to distribute their
securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriters
selected by ZipLink or the parties initiating such
registration, as the case may be. If any Holder disapproves of
any of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to ZipLink and the
underwriter. Any Registrable Securities withdrawn from such
underwriting shall be withdrawn from such registration.
(c) If a Piggy-back Registration is an underwritten primary
registration and the managing underwriters advise ZipLink, in
writing that, in their opinion, one or more marketing
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factors require a limitation on the number of securities to be
underwritten, ZipLink shall so advise all Holders of
Registrable Securities. The number of shares of securities
included in such Piggy-back Registration shall be reduced as
the underwriter and ZipLink require and those securities
included in the registration shall be allocated among the
Registrable Securities and any other securities requested to
be included in such registration pro-rata among the Holders of
such Registrable Securities and other securities on the basis
of the number of shares requested to be registered by each
such Holder.
(d) If a Piggy-back Registration is an underwritten secondary
registration on behalf of holders of ZipLink's securities, and
the managing underwriters advise ZipLink in writing that, in
their opinion, one or more marketing factors require a
limitation on the number of securities to be underwritten,
ZipLink shall so advise all Holders of Registrable Securities.
The number of shares of securities included in such Piggy-back
Registration shall be reduced as the underwriter and ZipLink
require and those securities included in such registration
shall be allocated FIRST to those held by the party requesting
such registration, and SECOND among the Registrable Securities
and any other securities requested to be included in such
registration pro-rata among the Holders of such Registrable
Securities and other securities on the basis of the number of
shares requested to be registered by each such Holder
1.3 EXPENSE OF REGISTRATION. All expenses incurred in effecting
registration pursuant to this Section 1, including, without limitation, all
registration and filing fees, printing expenses, expensed of compliance with
blue sky laws, fees and disbursements of counsel for ZipLink, and any accounting
and audit expenses incidental to or required by any such registration, shall be
borne by ZipLink except as follows:
(i) ZipLink shall not be required to pay fees and
disbursements of more than one counsel for all Holders who are selling
Registrable Securities in such registration, qualifications or
compliance.
(ii) ZipLink shall not be required to pay underwriter's fees,
discounts, commissions or transfer taxes relating to Registrable
Securities.
All expenses of any registration not otherwise borne by ZipLink shall
be borne pro rata among the Participating Holders (and ZipLink and the other
Holders registering securities in the offering) on the basis of the number of
shares registered.
1.4 REGISTRATION PROCEDURES. In the case of each registration
effected by ZipLink pursuant to this Agreement, ZipLink will keep each
Participating Holder advised in writing as to the initiation of registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in Section 1.3, at its expense ZipLink will:
(i) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such
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registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(ii) Furnish to the Participating Holders such numbers of
copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of their securities covered by such registration statement.
(iii) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering. Each Participating Holder shall also enter into and perform
its obligations under such an agreement.
(iv) In the event of any underwritten public offering, use its
best efforts to furnish, at the request of the managing underwriter, on
the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to
this Section 1.4:
(A) an opinion, dated such date, of the counsel
representing ZipLink for the purposes of such
registration, in form and substance as is customarily
given to underwriters in an underwritten public
offering, addressed to the underwriters, and
(B) a letter dated such date, from the independent
certified public accountants of ZipLink, in form and
substance as is customarily given by independent
certified public accountants to underwriters in an
underwritten public offering, addressed to the
underwriters.
(vi) Notify each Participating Holder at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act or upon the happening of any event as a result of which
the prospectus included in such registration statement, as then in
effect, includes an 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 not misleading in light of the
circumstances then existing.
1.5 INDEMNIFICATION. In the event any of the Registrable
Securities are included in a registration statement under Section 1:
(a) To the extent permitted by law, ZipLink will indemnify and
hold harmless each Holder, each officer, director and partner
of a Holder, and each person, if any, who controls such Holder
within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
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actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading or
arise out of or are based on any violation by ZipLink of any
rule or regulation promulgated under the Securities Act
applicable to ZipLink and relating to any action or non-action
required of ZipLink in connection with any such registration;
and will reimburse each such Holder, such officer, director
and partner or such controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the indemnity
agreement contained in this Section 1.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of ZipLink (which consent shall not be unreasonably
withheld), nor shall ZipLink be liable to a particular Holder,
officer, director, partner or controlling person in any such
case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or
supplements thereto in reliance upon and in conformity with
written information furnished expressly for use in connection
with such registration by such Holder, officer, director,
partner or controlling person or arise out of or are based
upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was
made in such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information
furnished by such Holder, officer, director, partner or
controlling person expressly for use in connection with such
registration;
(b) To the extent permitted by law, each Holder including
Registrable Securities in such registration statement
severally and not jointly, will indemnify and hold harmless
ZipLink, each person, if any, who controls ZipLink within the
meaning of the Securities Act, each officer of ZipLink and
director of ZipLink against all losses, claims, damages or
liabilities, joint or several, to which ZipLink or such
officer, director, or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or
alleged omission to state
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therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse ZipLink and each such officer, director and
controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, PROVIDED,
HOWEVER, that such Holder will be liable hereunder in any such
case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with
information pertaining to such Holder, as such, furnished in
writing to ZipLink by such Holder specifically for use in such
registration statement or prospectus and under no
circumstances or events will such Holder's liability exceed
such Holder's proceeds from the sale of Registrable Securities
pursuant to such registration statement or prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 1.5 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.5,
notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party
desires, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such
action, if prejudicial to his ability to defend such action,
shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.5, but the omission so
to notify the indemnifying party will not relieve him of any
liability which he may have to any indemnified party other
than under this Section 1.5.
(d) If the indemnification provided for in this Section 1.5 is for
any reason 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 thereunder, 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 which 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.
1.6 INFORMATION BY HOLDERS. The Holder or Holders of Registrable
Securities included
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in any registration shall furnish to ZipLink such information regarding such
Holder or Holders and the distribution proposed by such Holder or Holders as
ZipLink may request in writing and as shall be required in connection with any
registration, qualification or compliance referred herein.
1.7 TRANSFER OF REGISTRATION RIGHTS. The registration rights of
the Holders under this Agreement may only be transferred or assigned, in whole
or in part, to any transferee of Registrable Securities provided ZipLink is
given written notice by the Holder at the time of such transfer stating the name
and address of the transferee and identifying the shares with respect to which
the rights under this Agreement are being assigned. As a condition to the
transfer or assignment of any registration rights hereunder, the transferee or
assignee will enter into an agreement with ZipLink and its underwriter to the
effect that such transferee or assignee for a period of up to 180 days following
the effective date of the any registration statement of ZipLink filed under the
Securities Act of 1933 with respect to any underwritten public offering, will
not, to the extent requested by ZipLink and any underwriter, sell, agree to
sell, grant options to purchase or otherwise transfer or dispose of (other than
to donees who agree to be similarly bound) any securities of ZipLink owned by
him/her/it during such period except securities included in such registration.
In order to enforce the foregoing covenant, ZipLink may impose
stop-transfer instructions with respect to the Registration Securities until the
end of such period.
Section 2. MARKET STAND-OFF AGREEMENT. Each Holder hereby agrees that during
the 180 day period following the effective date of any registration statement of
ZipLink filed under the Securities Act of 1933 with respect to any underwritten
public offering, it shall not, to the extent requested by ZipLink and the
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of ZipLink (other than Registrable Securities included in
such registration statement) and that ZipLink may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the
shares or securities of every other person subject to the foregoing
registration) until the end of such period.
Section 3. TERMINATION OF REGISTRATION RIGHTS. The obligations of ZipLink
pursuant to Section 1 shall terminate with respect to each Holder at such time
as
(i) ZipLink is then providing current public information
within the meaning of Rule 144(c)(1) issued under the Securities Act,
and
(ii) such Holder is, or has been, able to sell under Rule 144
during any 3-month period all of the remaining Registrable Securities
issued or issuable to such Holder.
Section 4. MISCELLANEOUS.
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4.1 ASSIGNMENT. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto, provided, however, that except as provided in
Section 1.7, no Holders shall not assign this Agreement or its rights hereunder
without the prior written consent of ZipLink.
4.2 THIRD PARTIES. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
4.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
4.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.5 NOTICES. Except as otherwise expressly provided herein, any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon receipted personal delivery (professional courier
permissible), receipted United States certified mail delivery or confirmed
telegraph or telex transmission to the following addresses: (a) if to ZipLink,
40 Woodland Street, Hartford, Connecticut 06105 Attention: President, with a
copy to Wayne A. Martino, Esq., Brenner, Saltzman & Wallman, LLP, 271 Whitney
Avenue, New Haven, CT 06511, or (b) if to any Holder, to the address set forth
on the first page hereof (or such other address as such Holder may have provided
to ZipLink for such purpose).
4.6 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
4.7 RIGHTS OF HOLDERS. Each Holder shall have the absolute right
to exercise or refrain from exercising any right or rights that such Holder may
have by reason of this Agreement, including, without limitation, the right to
consent to the waiver or modification of any obligation under this Agreement,
and such Holder shall not incur any liability to any other holder of any
securities of ZipLink as a result of exercising or refraining from exercising
any such right or rights.
4.8 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any party to this Agreement, upon any breach
or default of the other party, shall impair any such right, power or remedy of
such non-breaching party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on
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the part of any party of any breach or default under this Agreement, or any
waiver on the part of any part of any provisions or conditions of this
Agreement, must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, or by law or otherwise afforded to any Holder, shall be cumulative
and not alternative.
4.9 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall, when taken together,
be deemed to constitute one and the same agreement.
4.10 ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto or incorporated by reference herein constitute the
full and entire understanding and agreement of the parties with regard to the
subject matter hereof and thereof and supersede all prior oral or written
understandings, agreements and commitments with regard to such subjects by or
among the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ZIPLINK, LLC
By: /s/ Christopher Jenkins
--------------------------------
Christopher Jenkins
Its President
Williams Communications, Inc.
By: /s/ James W. Dutton
--------------------------------
Name: James W. Dutton
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Title: Vice President
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