EXHIBIT 4.14
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of December 29, 2005, by and among Syntax-Brillian Corporation,
a Delaware corporation (the "Company"), and the persons and entities listed on
Exhibit A hereto (each, a "Purchaser" and, collectively, the "Purchasers").
WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of December 28, 2005 (the "Purchase Agreement"),
the Company has agreed to issue and sell to the Purchasers the Company's 6%
Redeemable Convertible Preferred Stock, par value $0.001 per share (the
"Preferred Stock"), and Warrants to purchase shares of its Common Stock; and
WHEREAS, to induce the Purchasers to execute and deliver the Purchase
Agreement and to purchase the Preferred Stock and the Warrants, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, with respect to the Conversion Shares, the Warrant Shares, the PIK
Dividend Shares and the Redemption Shares.
NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and other good and valuable consideration, the
receipt and legal adequacy of which are hereby acknowledged by the parties, the
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms used but not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section 3(1).
"Board" shall have the meaning set forth in Section 3(1).
"Business Day" means any day except Saturday, Sunday and any day which
is a legal holiday or a day on which banking institutions in the State of
Arizona generally are authorized or required by law or other government actions
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, $0.001 par value.
"Conversion Shares" shall have the meaning set forth in the definition
of "Registrable Securities."
"Effectiveness Date" means with respect to the Registration Statement
the earlier of (i) the 90th day following the Closing Date (or the 120th day
following the Closing Date in the event that the Registration Statement is
reviewed by the Commission), before which the Company will cause the
Registration Statement to become effective, and (ii) the 5th Business Day after
the date on which the Commission informs the Company (a) that the Commission
will not review the Registration Statement, or (b) that the Company may request
the acceleration of the effectiveness of the Registration Statement.
"Effectiveness Period" shall have the meaning set forth in Section 2.
"Event" shall have the meaning set forth in Section 8(d).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means, collectively, each holder from time to time of
Registrable Securities including, without limitation, each Purchaser and its
assignees. To the extent this Agreement refers to an election, consent, waiver,
request or approval of or by the Holder, such reference shall mean an election,
consent, waiver, request or approval by the holders of a majority in interest of
the then-outstanding Registrable Securities (on an as exercised basis).
"Indemnified Party" shall have the meaning set forth in Section 6(c).
"Indemnifying Party" shall have the meaning set forth in Section 6(c).
"Liquidated Damages" shall have the meaning set forth in Section 8(d).
"Losses" shall have the meaning set forth in Section 6(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PIK Dividend Shares" shall have the meaning set forth in the
definition of "Registrable Securities."
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities
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covered by the Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
"Redemption Shares" shall have the meaning set forth in the definition
of "Registrable Securities."
"Registrable Securities" means (a) all shares of Common Stock issuable
upon conversion of the Preferred Stock (collectively, the "Conversion Shares");
(b) all shares of Common Stock issuable upon exercise of the Warrants
(collectively, the "Warrant Shares"); (c) all shares of Common Stock issuable in
payment of dividends on the Preferred Stock (collectively, the "PIK Dividend
Shares"); (d) all shares of Common Stock issuable upon redemption of the
Preferred Stock (collectively, the "Redemption Shares"); and (e) any securities
issued or issuable upon any stock split, stock dividend, recapitalization or
similar event with respect to the foregoing and any other securities issued in
exchange of or replacement of the foregoing; until, in each such case (i) a
Registration Statement covering the Conversion Shares, the Warrant Shares, the
PIK Dividend Shares and the Redemption Shares has been declared effective by the
Commission and continues to be effective during the Effectiveness Period, or
(ii) such Conversion Shares, Warrant Shares, PIK Dividend Shares, or Redemption
Shares are sold in compliance with Rule 144 or may be sold pursuant to Rule
144(k), after which time such shares shall not be Registrable Securities.
"Registration Statement" means the registration statement, including
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement, for
the resale of the Registrable Securities required to be filed by the Company
with the Commission pursuant to this Agreement.
"Required Filing Date" means the forty-fifth (45th) day immediately
following the Closing Date.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any one firm of special counsel to Holder, for
which Holder will be reimbursed by the Company pursuant to the Purchase
Agreement.
"Warrant Shares" shall have the meaning set forth in the definition of
"Registrable Securities."
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2. Registration. On or prior to the Required Filing Date, the Company
shall prepare and file with the Commission a Registration Statement covering the
resale of the Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder) and shall contain (except if otherwise directed by the
Purchasers) the "Plan of Distribution" substantially in the form attached hereto
as Exhibit B. The Company shall (i) not permit any securities other than the
Registrable Securities to be included in the Registration Statement (except for
securities which are subject to written registration rights agreements entered
into by the Company prior to December 15, 2005), (ii) cause the Registration
Statement to be declared effective under the Securities Act (including filing
with the Commission a request for acceleration of effectiveness in accordance
with Rule 461 promulgated under the Securities Act within five (5) Business Days
after the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that the Registration Statement will not be
"reviewed," or not be subject to further review) as soon as possible after the
filing thereof, but in any event prior to the Effectiveness Date, and (iii) keep
such Registration Statement continuously effective under the Securities Act for
a period of two years from the Closing Date (the "Effectiveness Period").
3. Registration Procedures; Company's Obligations.
In connection with the registration of the Registrable Securities, the
Company shall:
(a) Prepare and file with the Commission on or prior to the Required
Filing Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, then
such registration shall be on another appropriate form in accordance with the
Securities Act and the Rules promulgated thereunder), and cause the Registration
Statement to become effective and remain effective as provided herein; provided,
however, that not less than three (3) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated therein by
reference), the Company shall (i) furnish to the Holder and any Special Counsel,
copies of all such documents proposed to be filed, which documents (other than
those incorporated by reference) will be subject to the timely review of and
comment by such Special Counsel, and (ii) at the request of the Holder cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
such Special Counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file the Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Holder
or any Special Counsel shall reasonably object in writing within three (3)
Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or
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any similar provisions then in force) promulgated under the Securities Act;
(iii) respond promptly to any comments received from the Commission with respect
to the Registration Statement or any amendment thereto and promptly provide to
the Holder upon request of the Holder true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holder set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notify the Holder of Registrable Securities to be sold and any
Special Counsel promptly (and, in the case of (i)(A) below, not less than three
(3) Business Days prior to such filing and, in the case of (i)(C) below, no
later than the first Business Day following the date on which the Registration
Statement becomes effective) and (if requested by any such Person) confirm such
notice in writing no later than three (3) Business Days following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed, (B) when the Commission
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement, and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The Company shall promptly furnish to the Special Counsel upon its
request, without charge, (i) any correspondence from the Commission or the
Commission's staff to the Company or its representatives relating to any
Registration Statement, and (ii) promptly after the same is prepared and filed
with the Commission, a copy of any written response to the correspondence
received from the Commission.
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any U.S. jurisdiction, at the earliest practicable moment.
(e) Furnish to the Holder and any Special Counsel upon request, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto,
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including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.
(f) Promptly deliver to the Holder and any Special Counsel upon
request, without charge, as many copies of the Registration Statement,
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the selling Holder in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto. Should the Holder offer or sell the Registrable
Securities, such Holder agrees to comply with all applicable securities laws.
(g) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holder and any
Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as the Holder reasonably requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject.
(h) Cooperate with the Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement and to enable such Registrable Securities to be in
such denominations and registered in such names as the Holder may request at
least two (2) Business Days prior to any sale of Registrable Securities.
(i) Upon the occurrence of any event contemplated by Section 3(c)(v),
promptly prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an 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, in the light
of the circumstances under which they were made, not misleading.
(j) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on any securities exchange,
quotation system, market or over-the-counter bulletin board, if any, on which
the same securities issued by the Company are then listed as and when required
pursuant to the Purchase Agreement.
(k) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-
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five (45) days after the end of any twelve (12) month period (or ninety (90)
days after the end of any twelve (12) month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Registration Statement, which statement shall
conform to the requirements of Rule 158.
(l) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may suspend effectiveness of
a Registration Statement and suspend the sale of Registrable Securities under a
Registration Statement one (1) time every three (3) months or three (3) times in
any twelve month period, provided that the Company may not suspend its
obligation for more than thirty (30) days in the aggregate in any twelve month
period if suspension is for any of the reasons listed above or sixty (60) days
in the aggregate in any twelve month period for any other reason (each, a
"Blackout Period"); provided, however, that no such suspension shall be
permitted for more than twenty (20) consecutive days, arising out of the same
set of facts, circumstances or transactions.
(m) Within two (2) Business Days after the Registration Statement which
includes the Registrable Securities is ordered effective by the Commission, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the Holder
whose Registrable Securities are included in such Registration Statement)
confirmation that the Registration Statement has been declared effective by the
Commission in the form attached hereto as Exhibit C.
4. Registration Procedures; Holder's Obligations
In connection with the registration of the Registrable Securities, the
Holder shall:
(a) Furnish to the Company a completed Questionnaire in the form
attached as Exhibit D not less than five Business Days prior to the Required
Filing Date or by the end of the three Business Days following the date on which
the Holder receives draft materials in accordance with Section 3(a).
(b) If the Registration Statement refers to the Holder by name or
otherwise as the holder of any securities of the Company, have the right to
require (if such reference to the Holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force) the deletion of
the reference to the Holder in any amendment or supplement to the Registration
Statement that will be filed or prepared subsequent to the time that such
reference ceases to be required.
(c) (i) not sell any Registrable Securities under the Registration
Statement until it has received copies of the Prospectus as then amended or
supplemented as contemplated in Section 3(f) and notice from the Company that
such Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 3(c), (ii) comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
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connection with sales of Registrable Securities pursuant to the Registration
Statement, and (iii) furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law to be
disclosed in the Registration Statement, and the Company may exclude from such
registration the Registrable Securities of the Holder if it fails to furnish
such information within a reasonable time prior to the filing of each
Registration Statement, supplemented Prospectus and/or amended Registration
Statement.
(d) upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(m), forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until the Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(i), or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement.
Each Holder hereby (i) acknowledges to the Company that the Commission
currently takes the position that coverage of short sales of shares of Common
Stock "against the box" made prior to the Effectiveness Date with any security
covered by any Prospectus is a violation of Section 5 of the Securities Act, as
set forth in Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated June 1997, compiled by the Office of
Chief Counsel, Division of Corporation Finance, (ii) agrees (on behalf of itself
or any Person over which it has direct control) not to use any of the securities
covered by any Prospectus to cover any short sales, hedging or similar
transactions with the same economic effect as a short sale, made prior to the
Effectiveness Date, and (iii) agrees to comply with Regulation M under the
federal securities laws.
5. Registration Expenses
All reasonable fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, the following: (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with each securities exchange or other market on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission or with the NASD pursuant to
NASD Conduct Rule 2710, if required, and (C) in compliance with state securities
or Blue Sky laws); (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is requested by the holders of a
majority of the Registrable Securities included in the Registration Statement);
(iii) messenger, telephone and delivery expenses of the Company; (iv) fees and
disbursements of counsel for the Company; and (v) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this
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Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.
6. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Purchaser,
its permitted assignees, officers, directors, agents, brokers (including brokers
who offer and sell Registrable Securities as principal as a result of a pledge
or any failure to perform under a margin call of Common Stock), investment
advisors and employees, each Person who controls any such Purchaser or permitted
assignee (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling Person, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all claims, losses,
damages, liabilities, penalties, judgments, costs (including, without
limitation, costs of investigation) and expenses (including, without limitation,
reasonable attorneys' fees and expenses) (collectively, "Losses"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus, as
supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except (i) to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding the Holder furnished in writing to the Company by the
Holder expressly for use therein, which information was reviewed and expressly
approved by the Holder or Special Counsel expressly for use in the Registration
Statement, such Prospectus or form of Prospectus or in any amendment or
supplement thereto, or (ii) as a result of the failure of the Holder to deliver
a Prospectus, as amended or supplemented, to a purchaser in connection with an
offer or sale. The Company shall notify the Holder promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of an Indemnified Party (as defined in Section 6(c) hereof) and shall
survive the transfer of the Registrable Securities by the Holder.
(b) Indemnification by Purchaser. Each Purchaser and its permitted
assignees shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all Losses, as incurred,
arising out of or relating to (i) the failure of the Holder to deliver a
Prospectus, as amended or supplemented, to a purchaser in connection with a
purchase or sale, (ii) the Holder's use of a representation or prospectus other
than the Prospectus, as amended or supplemented, in connection with a purchase
or sale, or (iii) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus, as supplemented or
amended, if applicable, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
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the statements therein (in the case of any Prospectus or form of Prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that (A) such
untrue statement or omission is contained in or omitted from any information so
furnished in writing by the Holder or the Special Counsel to the Company
specifically for inclusion in the Registration Statement or such Prospectus, and
(B) such information was reasonably relied upon by the Company for use in the
Registration Statement, such Prospectus or such form of Prospectus or, to the
extent that such information relates to the Holder or the Holder's proposed
method of distribution of Registrable Securities, was reviewed and expressly
approved in writing by the Holder expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus Supplement.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable under this Section 6(b) for only that amount as does not exceed the net
proceeds to the Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity pursuant to Section
6(a) or 6(b) hereunder (an "Indemnified Party"), such Indemnified Party promptly
shall notify the Person from whom indemnity is sought (the "Indemnifying Party)
in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, which consent shall not unreasonably be withheld, conditioned or delayed,
effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend
-10-
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder or pursuant to applicable law).
(d) Contribution. If a claim for indemnification under Section 6(a) or
6(b) is unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for under
Section 6(a) or 6(b) was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable or required to contribute under this Section 6(d) for only that amount as
does not exceed the net proceeds to the Holder as a result of the sale of
Registrable Securities pursuant to the Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
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.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
7. Rule 144.
As long as the Holder owns Registrable Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as the Holder owns Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act,
it will prepare and furnish to the Holder and make publicly available in
accordance with Rule 144(c)
-11-
promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act, as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as the Holder
may reasonably request, all to the extent required from time to time to enable
the Holder to sell Conversion Shares, Warrant Shares, PIK Dividend Shares and
Redemption Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions of counsel to the Company
referred to in the Purchase Agreement. Upon the request of any Holder, the
Company shall deliver to such Holder a written certification of a duly
authorized officer as to whether it has complied with such requirements.
8. Miscellaneous.
(a) Remedies. The remedies provided in this Agreement and the Purchase
Agreement are cumulative and not exclusive of any remedies provided by law. In
the event of a breach by the Company or by the Holder of any of their
obligations under this Agreement, the Holder or the Company, as the case may be,
in addition to being entitled to exercise all rights granted by law and under
this Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and the Holder agree
that monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
Affiliates has as of the date hereof entered into, nor shall the Company or any
of its Affiliates, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holder in this Agreement or otherwise conflicts with the
provisions hereof. Without limiting the generality of the foregoing, without the
written consent of the Holder, after the date hereof the Company shall not grant
to any Person the right to request the Company to register any securities of the
Company under the Securities Act if the rights so granted are inconsistent with
the rights granted to the Holder set forth herein, or otherwise prevent the
Company with complying with all of its obligations hereunder.
(c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holder in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement (except for
securities held by other security holders which are subject to written
registration rights agreements entered into by the Company prior to December 15,
2005, which securities may be included in the Registration Statement).
(d) Failure to File Registration Statement and Other Events. The
Company and the Holder agree that the Holder will suffer damages if the
Registration Statement is not filed on or prior to the Required Filing Date or
is not declared effective by the Commission on or prior to the Effectiveness
Date and maintained in the manner contemplated herein during the Effectiveness
Period or if certain other events occur. The Company and the Holder further
agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly,
-12-
if (i) the Registration Statement is not filed on or prior to the Required
Filing Date, or is not declared effective by the Commission on or prior to the
Effectiveness Date, or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under the
Securities Act within five (5) Business Days after the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not subject to further review,
or (iii) the Registration Statement is filed with and declared effective by the
Commission but thereafter (otherwise than as permitted by item (iv) below)
ceases to be effective or available as to all Registrable Securities for 30 days
during the Effectiveness Period, without being succeeded within a reasonable
period by a subsequent Registration Statement filed with and declared effective
by the Commission, or (iv) the Company suspends the use of the Prospectus
forming a part of such Registration Statement for more than thirty (30) days in
any period of 365 consecutive days if the Company suspends in reliance on its
ability to do so due to the existence of a development that, in the good faith
discretion of the Board, makes it appropriate to so suspend or which renders the
Company unable to comply with the Commission requirements, or the Company
suspends the use of the Prospectus forming a part of such Registration Statement
for more than sixty (60) days in any period of 365 consecutive days for any
other reason, or (v) during the Effectiveness Period, trading in the Common
Stock shall be suspended for any reason for more than three (3) consecutive
Business Days, or (vi) the Company has breached Section 3(m) of this Agreement
(any such failure or breach being referred to as an "Event"), the Company shall
pay as liquidated damages for such failure or breach and not as a penalty (the
"Liquidated Damages") to the Holder (or to its assignees, as the case may be) an
amount equal to two percent (2%) of the purchase price of the Preferred Stock
and the Warrants paid by the initial Holder pursuant to the Purchase Agreement
for each thirty (30) day period, pro rated for any period less than thirty (30)
days, following the Event until the applicable Event has been cured. Payments to
be made pursuant to this Section 8(d) shall be due and payable in cash in
arrears at the end of each thirty (30) day period. The parties agree that the
Liquidated Damages represent a reasonable estimate on the part of the parties,
as of the date of this Agreement, of the amount of damages that may be incurred
by the Holder if the Registration Statement is not filed on or prior to the
Required Filing Date or has not been declared effective by the Commission on or
prior to the Effectiveness Date and maintained in the manner contemplated herein
during the Effectiveness Period or if any other Event as described herein has
occurred.
(e) Consent to Jurisdiction. The Company and each Purchaser (i) hereby
irrevocably submit to the exclusive jurisdiction of the United States District
Court for the Northern District of Texas and the courts of the State of Texas
located in Dallas County for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the Purchase Agreement, (ii)
hereby waive, and agree not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper, and (iii) hereby waive
any and all rights they may have to a trial by jury with respect to any suit,
action or proceeding based on, or arising out of, under, or in connection with,
this Agreement. The Company and each Purchaser consent to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 8(e) shall affect or limit any right to serve
process in any other manner permitted by law.
-13-
(f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Purchasers.
(g) Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (i) upon hand delivery by telecopy or facsimile at the address or
number designated below (if delivered on a Business Day during normal business
hours where such notice is to be received), or the first Business Day following
such delivery (if delivered other than on a Business Day during normal business
hours where such notice is to be received), or (ii) on the second Business Day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
(x) if to the Company:
Syntax-Brillian Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxx Traurig, LLP
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
(y) if to any Purchaser:
At the address of such Purchaser set forth on Exhibit A to
this Agreement.
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.
(h) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of the Holder and its successors and assigns. The
Company may not assign this Agreement or any of its respective rights or
obligations hereunder without the prior written consent of the Purchasers Each
Purchaser may assign its rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
(i) Assignment of Registration Rights. The rights of the Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance
-14-
with the terms of this Agreement, shall be assignable by each Holder to any
transferee of the Holder of all or a portion of the shares of Registrable
Securities if: (i) the Holder 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; (ii) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (A) the name and address of such transferee or assignee, and (B) the
securities with respect to which such registration rights are being transferred
or assigned; (iii) following such transfer or assignment the further disposition
of such securities by the transferee or assignees is restricted under the
Securities Act and applicable state securities laws; (iv) at or before the time
the Company receives the written notice contemplated by clause (ii) of this
Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement; and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement and shall be for no less than 10% of the Registrable Securities. In
addition, the Holder shall have the right to assign its rights hereunder to any
other Person with the prior written consent of the Company, which consent shall
not be unreasonably withheld, conditioned or delayed. The rights to assignment
shall apply to the Holder (and to subsequent) successors and assigns. In the
event of an assignment pursuant to this Section 8(i), the Purchaser shall pay
all incremental costs and expenses incurred by the Company in connection with
filing a Registration Statement (or an amendment to the Registration Statement)
to register the shares of Registrable Securities assigned to any assignee or
transferee of the Purchaser.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to principles of
conflicts of law thereof. This Agreement shall not be interpreted or construed
with any presumption against the party causing this Agreement to be drafted.
(l) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(m) Termination. Except as otherwise specifically set forth herein,
this Agreement shall terminate on the earlier to occur of (i) the date on which
all Registrable Securities have been sold pursuant to the Registration
Statement, or (ii) the date on which all remaining Registrable Securities may be
sold without restriction pursuant to Rule 144(k) of the Securities Act.
(n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or
-15-
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(o) 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.
[Remainder of page intentionally left blank. Signature pages to follow.]
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized persons as of the date first
indicated above.
SYNTAX-BRILLIAN CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx,
Chief Financial Officer
[SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]
PURCHASERS:
GRYPHON MASTER FUND, L.P.
By: Gryphon Partners, L.P., its General Partner
By: Gryphon Management Partners, L.P., its General Partner
By: Gryphon Advisors, L.L.C., its General Partner
By: /s/ X.X. Xxxx, XX
------------------------------------
X.X. Xxxx, XX, Authorized Agent
GSSF MASTER FUND, LP
By: Gryphon Special Situations Fund, LP, its General Partner
By: GSSF Management Partners, LP, its General Partner
By: GSSF, LLC, its General Partner
By: /s/ X.X. Xxxx, XX
------------------------------------
X.X. Xxxx, XX, Authorized Agent
[ADDITIONAL PURCHASER SIGNATURE PAGES FOLLOW]
Name of Purchaser: Enable Growth Partners
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
--------------------
Title: Managing Partner
--------------------
Name of Purchaser: Enable Opportunity Partners
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
----------------------
Title: Managing Partner
---------------------
Name of Purchaser: Xxxxxx Bay Fund, L.P.
By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
----------------------
Title: Portfolio Manager
---------------------
Name of Purchaser: DKR SoundShore Oasis Holding Fund Ltd.
By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
----------------------
Title: Director
---------------------
Name of Purchaser: Castle Creek Technology Partners LLC
By: /s/ Xxxxxxx X. Friend
---------------------------------
Name: Xxxxxxx X. Friend
----------------------
Title: Managing Director
---------------------
Name of Purchaser: Bushido Capital Master Fund, LP
By: Bushido Capital Partners, Ltd.,
its General Partner
By: /s/ Xxxxxxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxxxxxx Xxxxxxx
-------------------
Title: Managing Director
-------------------
Name of Purchaser: Nite Capital LP
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Manager of the General Partner
Name of Purchaser: Iroquois Master Fund Ltd.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
---------------------
Title: Authorized Signatory
--------------------
Name of Purchaser: Longview Special Finance Inc.
By: /s/ Francois Morax
--------------------------------
Name: Francois Morax
---------------------
Title: Director
--------------------
Name of Purchaser: Lagunitas Partners LP
By: /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxxxxx & McBaine
Capital Management
----------------------
Title: General Partner
---------------------
Name of Purchaser: Xxx X. and Xxxxx X. Xxxxxx Trust
By: /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
----------------------
Title: Trustee
---------------------
Name of Purchaser: Xxxxxx & McBaine International
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxxxxx & McBaine
Capital Management
----------------------
Title: Investment Adviser
---------------------
Name of Purchaser: WesTech Electronics Limited
By: /s/ Tan Xxxx Xxxx
--------------------------------
Name: Tan Xxxx Xxxx
----------------------
Title: CFO
---------------------
EXHIBIT A
PURCHASERS
Gryphon Master Fund, L.P.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
With a copy to:
Xxxxxx X. Garden, P.C.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxx X. Garden, Esq.
GSSF Master Fund, LP
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx
With a copy to:
Xxxxxx X. Garden, P.C.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxx X. Garden, Esq.
Enable Growth Partners
Xxx Xxxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx Xxxxxx
Enable Opportunity Partners
Xxx Xxxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx Xxxxxx
Xxxxxx Bay Fund, L.P.
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax no. 000-000-0000
Attn: Xxxx Xxxx, May Xxx
DKR SoundShore Oasis Holding Fund Ltd.
x/x XXX Capital Partners L.P.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Fax. 000-000-0000
Castle Creek Technology Partners LLC
000 Xxxx Xxxxxxx Xxxx.
00xx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
Bushido Capital Master Fund, LP
c/o Bushido Capital Partners
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attn.: Xxxxxxxxxxx Xxxxxxx
Nite Capital LP
c/o Nite Capital, LLC
000 X. Xxxx Xxx., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Fax 000-000-0000
Attn: Xxxxx Xxxxxxx
Iroquois Master Fund Ltd.
000 Xxxxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
A-2
Longview Special Finance Inc.
Trident Xxxxxxxx
PO Box 146
Road Toad, Tortola
British Virgin Islands
Fax: 000-000-0000
Lagunitas Partners LP
c/o Gruber & McBaine Capital Management
50 Xxxxxx Place-PH
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Fax: (000) 000-0000
Xxx X. and Xxxxx X. Xxxxxx Trust
c/o Gruber & McBaine Capital Management
50 Xxxxxx Place-PH
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Fax: (000) 000-0000
Xxxxxx & XxXxxxx International
c/o Gruber & McBaine Capital Management
50 Xxxxxx Place-PH
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Fax: (000) 000-0000
WesTech Electronics Limited
Xx. 00 Xxxx Xxxxx Xxxxxxxx
Xxxx Xxxxx Xxxxxxxx 0
Xxxxxxxxx 000000
A-3
EXHIBIT B
PLAN OF DISTRIBUTION
We are registering the shares of Common Stock on behalf of the Selling
Stockholders. The Common Stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- settlement of short sales entered into after the effective date of
the registration statement of which this prospectus is a part;
- broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale;
- through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; or
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.
B-1
In connection with the sale of the Common Stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the Common Stock short and deliver these
securities to close out their short positions, or loan or pledge the Common
Stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).
The Company is required to pay certain fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus. Each Selling
Stockholder has advised us that they have not entered into any written or oral
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
Selling Stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the
date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
B-2
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to the Common Stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the Common Stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale.
B-3
EXHIBIT C
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Name and address of Transfer Agent]
___________________
___________________
___________________
Attn: ____________
Re: Syntax-Brillian Corporation
Ladies and Gentlemen:
We are counsel to Syntax-Brillian Corporation, a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of December
__, 2005, by and among the Company and the purchasers (the "PURCHASERS" and the
"HOLDERS") named therein pursuant to which the Company issued to the Purchasers
its 6% Redeemable Convertible Preferred Stock and other securities. Pursuant to
the Purchase Agreement, the Company has also entered into a Registration Rights
Agreement with the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), dated as of
December __, 2005, pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), under the Securities Act of 1933, as amended (the "1933 ACT"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ___________, 2005, 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 resale of the
Registrable Securities which names the Holders as selling stockholders
thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of, the Registration Statement.
Very truly yours,
By:
cc: [PURCHASERS]
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EXHIBIT D
FORM OF SELLING
SECURITYHOLDER QUESTIONNAIRE
SYNTAX-BRILLIAN CORPORATION
Selling Securityholder Questionnaire
The undersigned holder of 6% Redeemable Convertible Preferred Stock and
warrants to purchase shares of common stock, par value $0.001 per share (the
"Common Stock"), of Syntax-Brillian Corporation, a Delaware corporation (the
"Company"), (the "Registrable Securities") understands that the Company has
filed or intends to file with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (the "Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of
December __, 2005 (the "Registration Rights Agreement"), among the Company and
the Purchasers named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling
securityholder in the Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise specified under such Item 3)
in the Registration Statement.
The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
(a) Full Legal Name of Selling Securityholder:
(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities listed in Item 3 below are
held:
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(c) Full Legal Name of Natural Control Person (which means a natural
person who directly or indirectly alone or with others has power to
vote or dispose of the securities covered by the questionnaire):
2. Address for Notices to Selling Securityholder:
Telephone:
Fax:
Contact Person:
3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities beneficially
owned:
4. Broker-Dealer Status:
(a) Are you a broker-dealer?
[ ] Yes [ ] No
(b) If "yes" to Section 4(a), did you receive your Registrable
Securities as compensation for investment banking services to the
Company?
[ ] Yes [ ] No
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
(c) Are you an affiliate of a broker-dealer?
[ ] Yes [ ] No
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(d) If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of
business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings,
directly or indirectly, with any person to distribute the
Registrable Securities?
[ ] Yes [ ] No
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
5. Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder.
Except as set forth below in this Item 5, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Registrable Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
6. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5%
of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
The undersigned agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective. By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.
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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated: Beneficial Owner:
By:
Name:
Title:
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Xxxxxxxxx Xxxxxxx, LLP
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
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