EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
December 9, 1999, by and between Insignia Solutions plc, a company organized and
existing under the laws of England and Wales (the "Company"), with headquarters
located at 00000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and the persons
listed on Schedule A to this Agreement (the "Initial Purchasers").
RECITALS
A. In connection with the Securities Purchase Agreement dated of even
date herewith by and between the Company and Initial Purchasers (the "SECURITIES
PURCHASE AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to Initial Purchasers (i) the
Company's American Depository Shares (the "ADSS"), each ADS representing one
ordinary shares of 20p each nominal value of the Company (the "ORDINARY
SHARES"); (ii) a warrant exercisable for ADSs, in the form attached as EXHIBIT A
to the Securities Purchase Agreement (the "INITIAL WARRANT"); and (iii) a
warrant in the form of EXHIBIT C to the Securities Purchase Agreement ( the
"RESET WARRANT", and together with the Initial Warrant, the "WARRANTS"). ADSs
issued and purchased pursuant to the Securities Purchase Agreement are herein
referred to as "SHARES" and ADSs issued or issuable upon exercise of the
Warrants are herein referred to as "WARRANT SHARES".
B. To induce Initial Purchasers to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"SECURITIES ACT"), and applicable state securities laws.
AGREEMENTS
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, and
Initial Purchasers hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "PURCHASERS" means Initial Purchasers and any transferees
or assignees who agree to become bound by the provisions of this Agreement in
accordance with Article 9 hereof.
(b) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(c) "REGISTRABLE SECURITIES" means the Shares and the Warrant
Shares issued or issuable with respect to the Warrants (without regard to any
limitations on exercise) and any shares of capital stock issued or issuable,
from time to time (with any adjustments), on or in exchange for or otherwise
with respect to the ADRs or any other Registrable Securities.
(d) "REGISTRATION STATEMENT" means a registration statement of
the Company under the Securities Act pursuant to the provisions of this
Agreement.
(e) "FUNDED AMOUNT" means one million dollars ($1,000,000).
1.2 CAPITALIZED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement.
ARTICLE 2
REGISTRATION
2.1 MANDATORY REGISTRATION. The Company shall prepare and file as
soon as practicable but in any event on or prior to thirty (30) days after the
date of the Closing with the SEC a Registration Statement on Form S-3 (or, if
Form S-3 is not then available, on such form of Registration Statement as is
then available to effect a registration of all of the Registrable Securities
(without regard to any limitations on exercise of the Warrants), including those
issuable upon full exercise of the Warrants purchased and sold at the Closing.
The Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to and
(subject to the approval of (which approval shall be rendered within 3 business
days after receipt thereof and shall not be unreasonably withheld, delayed or
denied)) the Initial Purchasers and its counsel at least seven (7) business days
(or fewer to the extent provided herein) prior to its filing or other
submission. The Company shall also prepare and file such amendments to
registration statements and such additional registration statements as may from
time to time be required by this Agreement.
2.2 UNDERWRITTEN OFFERING. If any offering pursuant to a Registration
Statement filed pursuant to Section 2.1 hereof involves an underwritten
offering, the Purchasers who hold a majority in interest of the Registrable
Securities subject to such underwritten offering, with the consent of Initial
Purchasers, shall have the right to select one legal counsel to represent them
and an investment banker or bankers and manager or managers to administer the
offering, which investment banker or bankers or manager or managers shall be
reasonably satisfactory to the Company, and all fees and expenses of which shall
be paid by the Purchasers.
2.3 PAYMENTS BY THE COMPANY. The Company shall use its best efforts
to cause the Registration Statement filed pursuant to Section 2.1 hereof to
become effective as soon as practicable, but in no event later than the
ninetieth (90th) day (or the one hundred twentieth
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(120th) day if the SEC reviews such Registration Statement) following the
Closing Date (the "REGISTRATION DEADLINE"). If any Registration Statement
required to be filed by the Company pursuant to Section 2.1 hereof is not
declared effective by the SEC on or before the applicable Registration
Deadline (a "REGISTRATION FAILURE"), or after such Registration Statement has
been declared effective by the SEC, sales of all the Registrable Securities
cannot be made pursuant to the Registration Statement (by reason of a stop
order or the Company's failure to update the Registration Statement or any
other reason outside the control of the Purchasers) (a "REGISTRATION
SUSPENSION"), then the Company will make payments to the Purchasers in such
amounts and at such times as shall be determined pursuant to this Section 2.3
as partial relief for the damages to the Purchasers by reason of any such
delay in or reduction of their ability to sell the Registrable Securities
(which remedy shall not be exclusive of any other remedies available at law
or in equity). In the event of a Registration Failure, the Company shall pay
to the Purchasers an amount equal to (A) the Multiplier (as defined herein)
times (B) the sum of the aggregate Funded Amount plus the amount payable to
the Company under the Warrants times (C) the number of months (prorated per
day for partial months) following the Registration Deadline prior to the date
the Registration Statement filed pursuant to Section 2.1 is declared
effective by the SEC. In addition, in the event of a Registration
Suspension, the Company shall pay to the Purchasers an amount equal to (D)
the Multiplier times (E) the Funded Amount times (F) the number of months
(prorated per day for partial months) from (x) the date on which sales of all
the Registrable Securities first cannot be made to (y) the date on which
sales of all the Registrable Securities can again be made. Amounts to be
paid pursuant to this Section 2.3 shall be paid to Purchasers based upon the
number of Shares and Warrant Shares owned and Warrant Shares issuable upon
full conversion of the Warrants by each Purchaser, and shall be paid in cash.
Such payments shall be made within five (5) days after the end of each
period that gives rise to such obligation, provided that, if any such period
extends for more than thirty (30) days, payments shall be made for each such
thirty (30) day period within five (5) days after the end of such thirty (30)
day period. For any given date, the "MULTIPLIER" shall mean, (i) during the
first thirty days following the Registration Deadline during which there is a
Registration Failure or a Registration Suspension, 0.01, (ii) from the
thirty-first day of a Registration Failure or Registration Suspension until
the sixtieth such day, 0.015 and (iii) after the sixtieth day of a
Registration Failure or Registration Suspension, 0.02. Notwithstanding the
foregoing, a Registration Suspension effected by the Company pursuant to a
Permitted Blackout shall not give rise to an obligation to make such
payments. For purposes hereof, "PERMITTED BLACKOUT" shall mean the
suspension of the Registration Statement after the effective date upon the
good faith determination by the Company's Board of Directors that a material
financing, acquisition or other extraordinary corporate transaction is in the
best interest of the Company and its stockholders, and that disclosure
thereof to the public would have a material adverse effect on the ability of
the Company to consummate such material financing, acquisition or other
extraordinary corporate transaction, all after receiving advice to such
effect from a nationally recognized investment banking firm or, to the extent
appropriate, the Company's counsel which has been engaged by the Company in
connection with such financing, acquisition or other extraordinary corporate
transaction; PROVIDED, HOWEVER, that (i) no more than two (2) such Permitted
Blackouts may be imposed during any period of twelve (12) consecutive months
and (ii) the aggregate duration of all Permitted Blackouts during any period
of twelve (12) consecutive months shall be no more than fifteen (15) business
days.
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2.4 PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration
of the Registration Period (as hereinafter defined) the Company shall file with
the SEC a Registration Statement relating to an offering for its own account or
the account of others under the Securities Act of any of its equity securities
(other than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans), then the Company shall send to each Purchaser who
has a right to have Registrable Securities covered by a Registration Statement
pursuant to this Agreement written notice of such determination and, if within
fifteen (15) days after the date of such notice, such Purchaser shall so request
in writing, the Company shall include in such Registration Statement all or any
part of the Registrable Securities such Purchaser requests to be registered,
except that if, in connection with any underwritten public offering for the
account of the Company the managing underwriter(s) thereof shall impose a
limitation on the number of ADSs which may be included in the Registration
Statement because, in such underwriter(s)' judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the
Company shall be obligated to include in such Registration Statement only such
limited portion of the Registrable Securities with respect to which such
Purchaser has requested inclusion hereunder as the underwriter shall permit.
Any exclusion of Registrable Securities shall be made pro rata among the
Purchasers seeking to include Registrable Securities, in proportion to the
number of Registrable Securities sought to be included by such Purchasers;
provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of
which are not entitled to inclusion of such securities in such Registration
Statement or are not entitled to pro rata inclusion with the Registrable
Securities; and provided, further, however, that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable Securities shall be
made pro rata with holders of other securities having the right to include such
securities in the Registration Statement. No right to registration of
Registrable Securities under this Section 2.4 shall be construed to limit any
registration required under Section 2.1 or 3.2 hereof. If an offering in
connection with which a Purchaser is entitled to registration under this
Section 2.4 is an underwritten offering, then each Purchaser whose Registrable
Securities are included in such Registration Statement shall, unless otherwise
agreed by the Company, offer and sell such Registrable Securities in an
underwritten offering using the same underwriter or underwriters and, subject to
the provisions of this Agreement, on the same terms and conditions as other ADSs
included in such underwritten offering. So long as a Registration Statement is
effective and immediately available for use so that all of the Registrable
Securities may be sold in reliance thereon, the provisions of this section shall
not apply.
2.5 ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
re-sale by Initial Purchasers and any other Purchasers of the Registrable
Securities and the Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
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ARTICLE 3
OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations, including with respect to each
Registration Statement to be filed hereunder:
3.1 The Company shall prepare promptly and file with the SEC each
Registration Statement required by Section 2.1, and cause each such Registration
Statement relating to Registrable Securities to become effective as soon as
practicable after such filing, and keep the Registration Statement effective
pursuant to Rule 415 and available for use at all times until such date as is
the earlier of (i) the date on which all of the Registrable Securities have been
sold (and no further Registrable Securities may be issued in the future) and
(ii) the date on which all of the Registrable Securities (in the reasonable
opinion of counsel to Initial Purchasers) may be immediately sold to the public
without registration and without restriction as to the number of Registrable
Securities to be sold, whether pursuant to Rule 144 or otherwise (the
"REGISTRATION PERIOD"). Each such Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein and all
documents incorporated by reference therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein not misleading.
3.2 The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with each Registration Statement
as may be necessary to keep such Registration Statement effective and available
for use at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by such Registration
Statement until the termination of the Registration Period or, if earlier, such
time as all of such Registrable Securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof as set
forth in such Registration Statement. In the event the number of Shares
available under a Registration Statement filed pursuant to this Agreement is at
any time insufficient to cover one hundred seventy five percent (175%) of the
ADSs issued or issuable pursuant to all of the then-issued Warrants or the
Securities Purchase Agreement (without regard to any limitations on exercise
contained therein), the Company shall amend, if permissible, the Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover two hundred percent (200%) of
the Warrant Shares issued or issuable upon exercise of the Warrants (without
regard to any limitation on exercise contained therein), in each case, as soon
as practicable, but in any event within five (5) days. The Company shall cause
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.
3.3 The Company shall furnish to each Purchaser whose Registrable
Securities are included in the Registration Statement and its legal counsel
(a) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2.1, each letter written by or on behalf of the Company to the
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SEC or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion, if any, thereof which contains information for which
the Company has sought confidential treatment), and (b) such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Purchaser may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned (or to be owned) by such Purchaser.
3.4 The Company shall (a) register and qualify the Registrable
Securities covered by each Registration Statement under securities laws of such
jurisdictions in the United States as each Purchaser who holds (or has the right
to hold) Registrable Securities being offered reasonably requests, (b) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness and availability for use thereof during
the applicable Registration Period, (c) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the applicable Registration Period, and (d) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; provided, however, that the Company shall not be required
in connection therewith or as a condition thereto to (i) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3.4, (ii) subject itself to general taxation in any such
jurisdiction, (iii) file a general consent to service of process in any such
jurisdiction, (iv) provide any undertakings that cause the Company material
expense or burden, or (v) make any change in its charter or by-laws, which in
each case the board of directors of the Company determines to be contrary to the
best interests of the Company and its stockholders.
3.5 In the event the Purchasers who hold a majority in interest of the
Registrable Securities being offered in an offering pursuant to a Registration
Statement or any amendment or supplement thereto under Section 2.1 or 3.2 hereof
select underwriters for the offering, the Company shall enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering, but shall not bear any
costs or expenses of the underwriting.
3.6 As soon as practicable after becoming aware of such event, the
Company shall notify (by telephone and also by facsimile and reputable overnight
courier) each Purchaser of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its best efforts as soon as
possible (but in any event within five (5) days) to prepare a supplement or
amendment to the Registration Statement (and make all required filings with the
SEC) to correct such untrue statement or omission, and the Company shall
simultaneously (and thereafter as requested) deliver such number of copies of
such supplement or amendment to each Purchaser (or other applicable document) as
such Purchaser may request in writing. Unless such an event is publicly
announced, the Company shall not, without the consent of the Purchaser, give
such Purchaser any material non-public information, but shall inform the
Purchasers that such prospectus
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includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
3.7 The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest practicable time and the Company shall immediately notify by facsimile
each Purchaser (at the facsimile number for such Purchaser set forth on the
signature page hereto) who holds Registrable Securities (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof.
3.8 The Company shall permit counsel designated by the Initial
Purchasers to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC, and not file any document in a form to which such counsel reasonably
objects, provided such objection shall be communicated to the Company within 3
business days after receipt of such Registration Statement by Purchaser.
3.9 [Intentionally deleted].
3.10 At the request of any Purchaser, the Company shall furnish, on the
date of effectiveness of the Registration Statement and thereafter from time to
time on such dates as a Purchaser may reasonably request (a) an opinion, dated
as of such applicable date, from counsel representing the Company addressed to
the Purchasers and in form, scope and substance as is customarily given in an
underwritten public offering and (b) a letter, dated as of such applicable date,
from the Company's independent certified public accountants addressed to the
Purchasers and in form, scope and substance as customarily given to underwriters
in an underwritten public offering.
3.11 The Company shall make available for inspection by (i) any
Purchaser, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) attorneys and accountants retained by any
Purchaser, and (iv) attorneys retained by such underwriters (collectively, the
"INSPECTORS") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "RECORDS"), as shall
be reasonably deemed necessary by each Inspector and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to a Purchaser) of any
Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified in
writing, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required to be disclosed in such Registration Statement to permit Purchaser to
sell under such Registration Statement, (b) the release of such Records is
ordered pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, or is otherwise required by applicable law or legal
process or (c) the information in such Records has been made generally available
to the public other than by disclosure in violation of this or any other
agreement (to the knowledge of the relevant Purchaser). The Company shall not
be required to disclose any confidential information in such Records to any
Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in
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form and reasonable substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this Section 3.11. Each
Purchaser agrees that it shall, upon learning that disclosure of such Records
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company,
at its expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, the Records deemed confidential. Nothing
herein shall be deemed to limit a Purchaser's ability to sell Registrable
Securities in a manner which is consistent with applicable laws and
regulations.
3.12 The Company shall hold in confidence and not make any disclosure
of information concerning a Purchaser provided to the Company excluding any
information provided by Purchaser for use in or in connection with a
Registration Statement unless (a) disclosure of such information is necessary to
comply with federal or state securities laws, (b) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (c) the release of such information is ordered pursuant
to a subpoena or other order from a court or governmental body of competent
jurisdiction or is otherwise required by applicable law or legal process,
(d) such information has been made generally available to the public other than
by disclosure in violation of this or any other agreement (to the knowledge of
the Company), or (e) such Purchaser consents to the form and content of any such
disclosure. The Company agrees that it shall, upon learning that disclosure of
such information concerning a Purchaser is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Purchaser prior to making such disclosure, and allow the
Purchaser, at its expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.
3.13 From and after each Closing, the Company shall cause the listing
and the continuation of listing of all the Registrable Securities related to
such Closing and required to be covered by a Registration Statement on the
Nasdaq National Market, the New York Stock Exchange or the American Stock
Exchange and cause the Registrable Securities to be quoted or listed on each
additional national securities exchange or quotation system upon which the ADRs
are then listed or quoted.
3.14 The Company shall provide a transfer agent and depositary, which
may be a single entity, for the Registrable Securities not later than the
effective date of the applicable Registration Statement.
3.15 The Company shall cooperate with the Purchasers who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Purchasers may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Purchasers may request, and, within two (2)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the
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Purchasers whose Registrable Securities are included in such Registration
Statement) an opinion of such counsel in the form attached hereto as EXHIBIT
1.
3.16 At the request of any Purchaser, the Company shall promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used
in connection with a Registration Statement filed pursuant hereto as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.
3.17 The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities covered by the
Registration Statement and all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation, the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission).
3.18 The Company shall take all such other actions as any Purchaser or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities, but shall not be required to
incur any costs or expenses in connection therewith not otherwise provided
herein to be borne by the Company.
3.19 From and after the date of this Agreement, the Company shall not,
and shall not agree to, allow the holders of any securities of the Company
(other than Purchasers with respect to Registrable Securities) to include any of
their securities in any Registration Statement or any amendment or supplement
thereto under Section 2.1 or 3.2 hereof without the consent of Initial Purchaser
and the holders of a majority of the Registrable Securities. Without the
consent of Initial Purchaser, until the effectiveness of the Registration
Statements contemplated by Section 2.1 hereof, the Company shall not file any
other Registration Statement for the sale of any securities, whether for the
account of the Company or any other person.
3.20 The Registration Statement shall state that it covers such
indeterminate number of additional shares as may be issuable upon exercise of
the Warrants to prevent dilution resulting from stock splits, stock dividends
and other similar transactions.
ARTICLE 4
OBLIGATIONS OF THE PURCHASERS
In connection with the registration of the Registrable Securities, the
Purchasers shall have the following obligations:
4.1 Each Purchaser shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities. At least
five (5) business days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Purchaser of the
information the Company requires from each such Purchaser.
4.2 Each Purchaser, by such Purchaser's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection
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with the preparation and filing of the Registration Statements hereunder,
unless such Purchaser has notified the Company in writing of such Purchaser's
election to exclude all of such Purchaser's Registrable Securities from the
Registration Statement.
4.3 Each Purchaser whose Registrable Securities are included in a
Registration Statement understands that the Securities Act may require delivery
of a prospectus relating thereto in connection with any sale thereof pursuant to
such Registration Statement, and each such Purchaser shall use its reasonable
efforts to comply with the applicable prospectus delivery requirements of the
Securities Act in connection with any such sale.
4.4 [Intentionally omitted]
4.5 Each Purchaser agrees that, upon receipt of written notice from
the Company of the happening of any event of the kind described in Section 3.6,
such Purchaser will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Purchaser's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3.6 or advice that a supplement or
amendment is not required and, if so directed by the Company, such Purchaser
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Purchaser's possession (other than a limited number of permanent file copies),
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice. Purchaser's obligations under this paragraph shall in
no way limit the Company's obligations under this Agreement or Purchaser's
rights or remedies against the Company with respect to any breach or threatened
breach by the Company of any such obligations.
4.6 Without limiting a Purchaser's rights under Section 2.1 or 3.2
hereof, no Purchaser may participate in any underwritten distribution hereunder
unless such Purchaser (a) agrees to sell such Purchaser's Registrable Securities
on the basis provided in any underwriting agreements in usual and customary form
entered into by the Company pursuant to Section 3.5 hereof, (b) completes and
executes all questionnaires, powers of attorney, custody agreements,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements, and (c) agrees to pay its pro
rata share of all underwriting discounts and commissions and any expenses in
excess of those payable by the Company pursuant to Article 5. Without
implication that the contrary would otherwise be true, it is expressly
understood and agreed that no Purchaser shall be required to participate in any
such underwritten distribution.
ARTICLE 5
EXPENSES OF REGISTRATION
All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to
Articles 2 and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company and the fees and disbursements of one firm of attorneys
for the Purchasers, shall be borne by the Company.
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ARTICLE 6
INDEMNIFICATION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify, hold
harmless and defend (a) each Purchaser who holds such Registrable Securities,
(b) each underwriter of Registrable Securities and (c) the directors, officers,
partners, members, employees, agents and persons who control any Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), if any, (each,
an "INDEMNIFIED PERSON"), against any losses, claims, damages, liabilities or
expenses (collectively, together with actions, proceedings or inquiries whether
or not in any court, before any administrative body or by any regulatory or
self-regulatory organization, whether commenced or threatened, in respect
thereof, "CLAIMS") to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, "VIOLATIONS"). The Company shall reimburse each such Indemnified
Person, promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6.1: (x) shall not apply to an Indemnified Person
with respect to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in the Registration
Statement or any such amendment thereof or supplement thereto; (y) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (z) with respect to any preliminary prospectus, shall
not inure to the benefit of any Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented, if such
corrected prospectus was timely made available by the Company pursuant to
Section 3.3 hereof, and the Indemnified Person was promptly advised in writing
not to use the incorrect prospectus prior to the use giving rise to a Violation
and such Indemnified Person, notwithstanding such advice, used it. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by a Purchaser pursuant to Article 9.
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6.2 In connection with any Registration Statement in which a Purchaser
is participating, to the extent permitted by law, each such Purchaser agrees to
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 6.1, the Company, each of its directors, each of its
officers who signs the Registration Statement, its employees, agents and
persons, if any, who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and any other stockholder
selling securities pursuant to the Registration Statement, together with its
directors, officers and members, and any person who controls such stockholder or
underwriter within the meaning of the Securities Act or the Exchange Act (such
an "INDEMNIFIED PARTY"), against any Claim to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim arises out of or is based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such
Purchaser expressly for use in connection with such Registration Statement; and
such Purchaser will reimburse any legal or other expenses (promptly as such
expenses are incurred and are due and payable) reasonably incurred by them in
connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6.2 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Purchaser, which consent shall not be
unreasonably withheld; provided, further, however, that a Purchaser shall be
liable under this Agreement (including this Section 6.2 and Article 7) for only
that amount as does not exceed the net proceeds actually received by such
Purchaser as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Purchasers
pursuant to Article 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6.2 with respect
to any preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, and the Indemnified Party failed to utilize such
corrected prospectus.
6.3 Promptly after receipt by an Indemnified Person or Indemnified
Party under this Article 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Article 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right (at its expense) to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume and continue control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that
such indemnifying party shall diligently pursue such defense and an indemnifying
party shall not be entitled to assume (or continue) such defense if the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
conflicts of interest between such Indemnified Person or Indemnified Party and
the indemnifying party, and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person or the Indemnified Party and any such
Indemnified Person or Indemnified Party reasonably determines
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that there may be legal defenses available to such Indemnified Person or
Indemnified Party which are different from or in addition to those available
to such indemnifying party. Notwithstanding any assumption of such defense
and without limiting any indemnification obligation provided for in Section
6.1 or 6.2, the Indemnified Party or Indemnified Persons, as the case may be,
shall be entitled to be represented by counsel (at its own expense if the
indemnifying party is permitted to assume and continue control of the defense
and otherwise at the expense of the indemnifying party) and such counsel
shall be entitled to participate in such defense. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of
any liability to the Indemnified Person or Indemnified Party under this
Article 6, except to the extent that the indemnifying party is actually
prejudiced in its ability to defend such action. The indemnification
required by this Article 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
ARTICLE 7
CONTRIBUTION
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Article 6 to the fullest extent permitted by law; provided, however, that
(i) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation, and
(ii) contribution (together with any indemnification or other obligations under
this Agreement) by any Purchaser of Registrable Securities shall be limited in
amount to the net amount of proceeds received by such Purchaser from the sale of
its Registrable Securities.
ARTICLE 8
REPORTS UNDER THE EXCHANGE ACT
With a view to making available to each Purchaser the benefits of
Rule 144, the Company agrees that so long as any Purchaser holds Warrants, any
Registrable Securities, the Company shall:
8.1 (a) Not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.
(b) File with the SEC in a timely manner and make and keep
available all reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the filing and availability of
such reports and other documents is required for the applicable provisions of
Rule 144; and
8.2 Furnish to each Purchaser promptly upon written request, (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the
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Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Purchaser to sell such securities pursuant to Rule 144 without registration.
ARTICLE 9
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Purchasers hereunder as to Registrable Securities
transferred by a Purchaser (or represented by Warrants transferred by a
Purchaser), including the right to have the Company register Registrable
Securities pursuant to this Agreement, shall be automatically assigned by each
Purchaser to any transferee of all or any portion of the Registrable Securities
if: (a) the Purchaser agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (i) the name and address of such transferee or assignee, (ii) the securities
with respect to which such registration rights are being transferred or assigned
and (iii) the information specified in Section 3.12 to such transferee,
(c) following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
or applicable state securities laws, and (d) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing for the benefit of the Company to be
bound by all of the provisions contained herein. The rights of a Purchaser
hereunder with respect to any Registrable Securities not transferred (and not
represented by Warrants transferred) shall not be assigned by virtue of the
transfer of other Registrable Securities or transferred Warrants representing
other Registrable Securities.
ARTICLE 10
AMENDMENT OF REGISTRATION RIGHTS
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company,
Initial Purchasers (so long as Initial Purchasers still beneficially owns
Registrable Securities) and Purchasers who hold a majority interest of the
Registrable Securities. Any amendment or waiver effected in accordance with
this Article 10 shall be binding upon each Purchaser and the Company.
Notwithstanding the foregoing, no amendment or waiver shall retroactively affect
any Purchaser without its consent or prospectively adversely affect any
Purchaser who no longer owns any Warrants, Registrable Securities without its
consent. No amendment or waiver may adversely affect one or more Purchasers or
group of Purchasers vis-a-vis any other Purchaser or group of Purchasers.
Neither Article 6 nor Article 7 hereof may be amended or waived in a manner
adverse to a Purchaser without its consent. Notwithstanding anything to the
contrary contained in this Article 10, no amendment or waiver shall be
applicable to an Initial Purchaser who does not consent in writing thereto.
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ARTICLE 11
MISCELLANEOUS
11.1 A person or entity is deemed to be a holder (or a holder in
interest) of Registrable Securities whenever such person or entity owns of
record such Registrable Securities (or the Warrants which may be exercised for
Registrable Securities). If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities (or Warrants, as the case may be).
11.2 Any notices herein required or permitted to be given shall be in
writing and may be personally served or delivered by courier or by
machine-generated confirmed telecopy, and shall be deemed delivered at the time
and date of receipt (which shall include telephone line facsimile transmission).
The addresses for such communications shall be:
If to the Company:
Insignia Solutions plc
00000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000)000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxx PC
0000 Xxxxxxxxxxx Xxxx
X.X. Xxx 00000
Xxxx Xxxx, Xxxxxxxxxx 00000
Telecopy: (000)000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
and if to Initial Purchasers:
To the names and addresses set forth on Schedule A hereto.
with a copy to:
Irell & Xxxxxxx, LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
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and if to any Purchaser, at such address as such Purchaser, shall have
provided in writing to the Company, or at such other address as each such
party furnishes by notice given in accordance with this Section 11.2.
11.3 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
11.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed in the State of New York. The Company irrevocably consents to the
jurisdiction of the federal courts located in the state of New York and the
state courts of the State of New York located in the County of New York in the
State of New York in any suit or proceeding based on or arising under this
Agreement and irrevocably agrees that all claims in respect of such suit or
proceeding may be determined in such courts. The Company irrevocably waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding.
The parties hereto further agree that service of process upon the parties hereto
mailed by first class mail shall be deemed in every respect effective service of
process upon each such party in any such suit or proceeding. Nothing herein
shall affect either party's right to serve process in any other manner permitted
by law. The parties hereto agree that a final non-appealable judgment in any
such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
11.5 This Agreement and the Securities Purchase Agreement (including
all schedules and exhibits thereto and all certificates and opinions required
thereby) constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the Securities Purchase Agreement supersede all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
11.6 Subject to the requirements of Article 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto. Notwithstanding anything to the contrary contained
herein, including, without limitation, Article 9 (and without compliance
therewith), the rights of a Purchaser hereunder shall be assignable to and
exercisable by a bona fide pledgee of the Registrable Securities in connection
with a Purchaser's margin or brokerage accounts.
11.7 The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
11.8 This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto, by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
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11.9 Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
11.10 Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by each Purchaser and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Purchasers and that the remedy at law for any such
breach may be inadequate.
11.11 The initial number of Registrable Securities included on any
Registration Statement and each increase to the number of Registrable Securities
included thereon shall be allocated pro rata among the Purchasers based on the
number of Registrable Securities held by each Purchaser at the time of such
establishment or increase, as the case may be. In the event a Purchaser shall
sell or otherwise transfer any of such holder's Registrable Securities, each
transferee shall be allocated a pro rata portion of the number of Registrable
Securities included on a Registration Statement for such transferor. Any ADSs
included on a Registration Statement and which remain allocated to any person or
entity which does not hold any Registrable Securities shall be allocated to the
remaining Purchasers, pro rata based on the number of shares of Registrable
Securities then held by such Purchasers. Without implication that the contrary
would otherwise be true, for purposes of this paragraph, all Warrants then
outstanding shall be assumed exercised for Registrable Securities (without
giving effect to any limitations on exercise contained therein).
11.12 Whenever the Company is required to make any cash payment to a
Purchaser under this Agreement, such cash payment shall be due on the date (the
"CASH DUE DATE") that such Purchaser delivers written notice from the Purchaser
to the Company. Such cash payment shall be made to the Purchaser by the method
(by certified or cashier's check or wire transfer of immediately available
funds) elected by such Holder. If such payment is not delivered within two (2)
days of the Cash Due Date, such Purchaser shall thereafter be entitled to
interest on the unpaid amount at a per annum rate equal to the lower of eighteen
percent (18%) and the highest interest rate permitted by applicable law until
such amount is paid in full to the Holder.
11.13 If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement.
* * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPANY:
INSIGNIA SOLUTIONS PLC
By: s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
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REGISTRATION RIGHTS AGREEMENT
(continued)
PURCHASERS:
XXXXXXX X. and XXXXXXXX XXXX
By s/Xxxxxxx X. Xxxx
XXXXXXX X. XXXX
By s/Xxxxxxxx Xxxx
XXXXXXXX XXXX
XXXXXXX X. and XXXXXXX XXXXXX
By s/Xxxxxxx X. Xxxxxx
XXXXXXX X. XXXXXX
By s/Xxxxxxx Xxxxxx
XXXXXXX XXXXXX
By s/Xxxxxx Xxxxx Xxxxx
XXXXXX XXXXX-XXXXX
AVALON PANAMA S.A.
By s/Avalon Panama S.A.
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EXHIBIT 1
TO REGISTRATION
RIGHTS AGREEMENT
[Date]
[Name and address
of transfer agent]
RE: INSIGNIA SOLUTIONS PLC
Ladies and Gentlemen:
We are counsel to Insignia Solutions plc, a company organized and
existing under the laws of England and Wales (the "COMPANY"), and we understand
that ______________________ (the "HOLDER") has purchased from the Company
American Depository Shares (the "ADSS") and certain Warrants to purchase
additional ADSs. The ADSs were purchased by the Holder pursuant to a Securities
Purchase Agreement, dated as of December __, 1999, by and among the Company and
the Holder (the "AGREEMENT"). Pursuant to a Registration Rights Agreement,
dated as of December __, 1999, by and among the Company and the Holder (the
"REGISTRATION RIGHTS AGREEMENT"), the Company agreed with the Holder, among
other things, to register the Registrable Securities (as that term is defined in
the Registration Rights Agreement) under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), upon the terms provided in the Registration Rights
Agreement. In connection with the Company's obligations under the Registration
Rights Agreement, on December __, 1999, the Company filed a Registration
Statement on Form S-3 (File No. 333- __________) (the "REGISTRATION STATEMENT")
with the Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities, which names the Holder as a selling stockholder
thereunder.
[Other customary introductory and scope of examination language to be
inserted, in each case as reasonably acceptable to Holders.]
Based on the foregoing, we are of the opinion that the resale of
Registrable Securities have been registered under the Securities Act.
[Other appropriate customary language to be included, in each case as
reasonably acceptable to Holders.]
Very truly yours,
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SCHEDULE A
Name, Address and Purchase Shares Warrants
Telecopy Number of Purchaser Price Purchased Purchased
----------------------------- -------- --------- ---------
Xxxxxxx X. and Xxxxxxxx Xxxx $250,000 59,084 17,725
Xxxxxxx X. and Xxxxxxx Xxxxxx $250,000 59,084 17,725
Xxxxxx Xxxxx-Xxxxx $250,000 59,084 17,725
Avalon Panama S.A. $250,000 59,084 17,725
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