REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
This
Registration Rights Agreement (the “Agreement”) is made and entered into as of
this 23rd day of July, 2007 by and among Terabeam, Inc., a Delaware corporation
(the “Company”), and the “Investors” named in that certain Purchase Agreement by
and among the Company and the Investors (the “Purchase Agreement”).
The
parties hereby agree as follows:
1. Certain
Definitions.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
means, with respect to any person, any other person which directly or indirectly
controls, is controlled by, or is under common control with, such
person.
“Business
Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.
“Common
Stock” shall mean the Company’s common stock, par value $0.01 per share, and
any securities into which such shares may hereinafter be
reclassified.
“Investors”
shall mean the Investors identified in the Purchase Agreement and any Affiliate
or permitted transferee of any Investor who is a subsequent holder of any
Warrants or Registrable Securities.
“Prospectus”
shall mean (i) the prospectus included in any Registration Statement, as amended
or supplemented by any prospectus supplement, with respect to the terms of
the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by
reference in such prospectus, and (ii) any “free writing prospectus” as defined
in Rule 405 under the 1933 Act.
“Register,”
“registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the 1933 Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.
“Registrable
Securities” shall mean (i) the Shares, (ii) the Warrant Shares and (iii) any
other securities issued or issuable with respect to or in exchange for
Registrable Securities; provided, that, a security shall cease to be a
Registrable Security upon (A) sale pursuant to a Registration Statement or
Rule
144 under the 1933 Act, or (B) such security becoming eligible for sale by
the
Investors pursuant to Rule 144(k).
“Registration
Statement” shall mean any registration statement of the Company filed under
the 1933 Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement, amendments and supplements to
such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration
Statement.
“Required
Investors” means the Investors holding a majority of the Registrable
Securities.
“SEC”
means the U.S. Securities and Exchange Commission.
“Shares”
means the shares of Common Stock issued pursuant to the Purchase
Agreement.
“1933
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
“Warrants”
means, the warrants to purchase shares of Common Stock issued to the Investors
pursuant to the Purchase Agreement, the form of which is attached to the
Purchase Agreement as Exhibit A.
“Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the
Warrants.
2. Registration.
(a) Registration
Statements.
(i) Promptly
following the closing of the purchase and sale of the securities contemplated
by
the Purchase Agreement (the “Closing Date”) but no later than thirty (30) days
after the Closing Date (the “Filing Deadline”), the Company shall prepare and
file with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is
not
then available to the Company, on such form of registration statement as is
then
available to effect a registration for resale of the Registrable Securities),
covering the resale of the Registrable Securities in an amount at least equal
to
the Shares and the Warrant Shares. Subject to any SEC comments, such
Registration Statement shall include the plan of distribution attached hereto
as
Exhibit A. Such Registration Statement also shall cover, to
the extent allowable under the 1933 Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions
with
respect to the Registrable Securities. Such Registration Statement
shall not include any shares of Common Stock or other securities for the account
of any other holder without the prior written consent of the Required
Investors. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission. If a Registration
Statement covering the Registrable Securities is not filed with the SEC on
or
prior to the Filing Deadline, the Company will make pro rata payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to
1.0%
of the aggregate amount invested by such Investor for each 30-day period or
pro
rata for any portion thereof following the Filing Deadline for which no
Registration Statement is filed with respect to the Registrable
Securities. Such payments shall constitute the Investors’ exclusive
monetary remedy for such events, but shall not affect the right of the Investors
to seek injunctive relief. Such payments shall be made to each
Investor in cash.
(ii) Additional
Registrable Securities. Upon the written demand of any Investor
and upon any change in the Warrant Price (as defined in the Warrant) such that
additional shares of Common Stock become issuable upon the exercise of the
Warrants (the “Additional Shares”), the Company shall prepare and file with the
SEC one or more Registration
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Statements
on Form S-3 or amend the Registration Statement filed pursuant to clause (i)
above, if such Registration Statement has not previously been declared effective
(or, if Form S-3 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Additional Shares) covering the resale of the Additional Shares, but
only
to the extent the Additional Shares are not at the time covered by an effective
Registration Statement. Subject to any SEC comments, such
Registration Statement shall include the plan of distribution attached hereto
as
Exhibit A. Such Registration Statement also shall cover, to
the extent allowable under the 1933 Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions
with
respect to the Additional Shares. Such Registration Statement shall
not include any shares of Common Stock or other securities for the account
of
any other holder without the prior written consent of the Required
Investors. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission. If a Registration
Statement covering the Additional Shares is required to be filed under this
Section 2(a)(ii) and is not filed with the SEC within 20 days of the request
of
any Investor or upon the occurrence of any of the events specified in this
Section 2(a)(ii), the Company will make pro rata payments to each Investor,
as
liquidated damages and not as a penalty, in an amount equal to 1.0% of the
aggregate amount invested by such Investor for each 30-day period or pro rata
for any portion thereof following the date by which such Registration Statement
should have been filed for which no Registration Statement is filed with respect
to the Additional Shares. Such payments shall constitute the
Investors’ exclusive monetary remedy for such events, but shall not affect the
right of the Investors to seek injunctive relief. Such payments shall
be made to each Investor in cash.
(b) Expenses. The
Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws, listing fees, fees and expenses of
one
counsel to the Investors not to exceed $5,000 and the Investors’ reasonable
expenses in connection with the registration, but excluding discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities
being sold.
(c) Effectiveness.
(i) The
Company shall use commercially reasonable efforts to have the Registration
Statement declared effective as soon as practicable. The Company
shall notify the Investors by facsimile or e-mail as promptly as practicable,
and in any event, within twenty-four (24) hours, after any Registration
Statement is declared effective and shall simultaneously provide the Investors
with copies of any related Prospectus to be used in connection with the sale
or
other disposition of the securities covered thereby. If (A)(x) a
Registration Statement covering the Registrable Securities is not declared
effective by the SEC prior to the earlier of (i) five (5) Business Days after
the SEC shall have informed the Company that no review of the Registration
Statement will be made or that the SEC has no further comments on the
Registration Statement or (ii) the 90th day after
the
Closing Date (the 120th day if
the SEC
reviews the Registration Statement) or (y) a Registration Statement covering
Additional Shares is not
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declared
effective by the SEC within ninety (90) days following the time such
Registration Statement was required to be filed pursuant to Section 2(a)(ii)
(120 days if the SEC reviews the Registration Statement), or (B) after a
Registration Statement has been declared effective by the SEC, sales cannot
be
made pursuant to such Registration Statement for any reason (including without
limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement), but excluding any Allowed Delay (as defined below)
or
the inability of any Investor to sell the Registrable Securities covered thereby
due to market conditions and except as excused pursuant to subparagraph (ii)
below, then the Company will make pro rata payments to each Investor, as
liquidated damages and not as a penalty, in an amount equal to 1.0% of the
aggregate amount invested by such Investor for each 30- day period or pro rata
for any portion thereof following the date by which such Registration Statement
should have been effective (the “Blackout Period”). Such payments
shall constitute the Investors’ exclusive monetary remedy for such events, but
shall not affect the right of the Investors to seek injunctive
relief. The amounts payable as liquidated damages pursuant to this
paragraph shall be paid monthly within three (3) Business Days of the last
day
of each month following the commencement of the Blackout Period until the
termination of the Blackout Period. Such payments shall be made to
each Investor in cash.
(ii) For
not more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay
the
disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at the
time
is not, in the good faith opinion of the Company, in the best interests of
the
Company (an “Allowed Delay”); provided, that the Company shall promptly (a)
notify the Investors in writing of the existence of (but in no event, without
the prior written consent of an Investor, shall the Company disclose to such
Investor any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, (b) advise the Investors in writing
to cease all sales under the Registration Statement until the end of the Allowed
Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay
as promptly as practicable.
3. Company
Obligations. The Company will use commercially reasonable efforts
to effect the registration of the Registrable Securities in accordance with
the
terms hereof, and pursuant thereto the Company will, as expeditiously as
possible:
(a) use
commercially reasonable efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earliest of (i) the date on which all Registrable Securities covered
by
such Registration Statement as amended from time to time, have been sold, (ii)
the date on which all Registrable Securities covered by such Registration
Statement may be sold pursuant to Rule 144(k) and (iii) the third anniversary
of
the initial effective date (the “Effectiveness Period”) and advise the Investors
in writing when the Effectiveness Period has expired;
(b) prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and to comply
with
the provisions
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of
the
1933 Act and the 1934 Act with respect to the distribution of all of the
Registrable Securities covered thereby;
(c) provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer
than
three (3) Business Days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects and cause its officers and
directors, counsel, and independent auditors to respond to such inquiries as
shall be necessary, in the opinion of counsel to the Investors, to conduct
a
reasonable investigation within the meaning of the 1933 Act;
(d) furnish
to the Investors and their legal counsel (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company (but
not later than two (2) Business Days after the filing date, receipt date or
sending date, as the case may be) one (1) copy of any Registration Statement
and
any amendment thereto, each preliminary prospectus and Prospectus and each
amendment or supplement thereto, and each letter written by or on behalf of
the
Company to the 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 of any thereof which contains information
for
which the Company has sought confidential treatment), and (ii) such number
of
copies of a Prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as each Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor that are covered by the related Registration
Statement;
(e) use
commercially reasonable efforts to (i) prevent the issuance of any stop order
or
other suspension of effectiveness and, (ii) if such order is issued, obtain
the
withdrawal of any such order at the earliest possible moment;
(f) prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors and their counsel
in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions requested by the Investors and do any and all other commercially
reasonable acts or things necessary or advisable to enable the distribution
in
such jurisdictions of the Registrable Securities covered by the Registration
Statement; 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(f), (ii) subject itself to general taxation
in
any jurisdiction where it would not otherwise be so subject but for this Section
3(f), or (iii) file a general consent to service of process in any such
jurisdiction;
(g)
use commercially reasonable efforts to cause all
Registrable Securities covered by a Registration Statement to be listed on
each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then listed;
(h)
immediately notify the Investors, at any
time prior to the end of the Effectiveness Period, upon discovery that, or
upon
the happening of any event as a result of
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which,
the Prospectus includes an untrue statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and promptly prepare, file with the SEC and furnish to such holder a supplement
to or an amendment of such Prospectus as may be necessary so that such
Prospectus shall not include 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 not misleading in light of the circumstances then existing;
and
(i)
otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC under the 1933 Act and
the
1934 Act, including, without limitation, Rule 172 under the 1933 Act, file
any
final Prospectus, including any supplement or amendment thereof, with the SEC
pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in
writing if, at any time during the Effectiveness Period, the Company does not
satisfy the conditions specified in Rule 172 and, as a result thereof, the
Investors are required to deliver a Prospectus in connection with any
disposition of Registrable Securities and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the 1933
Act, including Rule 158 promulgated thereunder (for the purpose of this
subsection 3(i), “Availability Date” means the 45th day following the end of the
fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of
the
Company’s fiscal year, “Availability Date” means the 90th day after the end of
such fourth fiscal quarter).
(j)
With a view to making available to the Investors the
benefits of Rule 144 (or its successor rule) and any other rule or regulation
of
the SEC that may at any time permit the Investors to sell shares of Common
Stock
to the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as those terms
are understood and defined in Rule 144, until the earlier of (A) six months
after such date as all of the Registrable Securities may be resold pursuant
to
Rule 144(k) or any other rule of similar effect (assuming a cashless exercise
of
the Warrants) or (B) such date as all of the Registrable Securities shall have
been resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1934 Act; and (iii) furnish to
each
Investor upon request, as long as such Investor owns any Registrable Securities,
(A) a written statement by the Company that it has complied with the reporting
requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail such Investor
of
any rule or regulation of the SEC that permits the selling of any such
Registrable Securities without registration.
4. Due
Diligence Review; Information. The Company shall make available,
during normal business hours, for inspection and review by the Investors,
advisors to and representatives of the Investors (who may or may not be
affiliated with the Investors and who are reasonably acceptable to the Company),
all financial and other records, all SEC Filings (as defined in the Purchase
Agreement) and other filings with the SEC, and all other corporate
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documents
and properties of the Company as may be reasonably necessary for the purpose
of
such review, and cause the Company’s officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested
by
the Investors or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response
to
all questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investors and such
representatives, advisors and underwriters and their respective accountants
and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.
The
Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives
of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and provides
the Investors, such advisors and representatives with the opportunity to accept
or refuse to accept such material nonpublic information for review and any
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.
5. Obligations
of the Investors.
(a) Each
Investor shall furnish in writing 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 and shall
execute such documents in connection with such registration as the Company
may
reasonably request. At least five (5) Business Days prior to the
first anticipated filing date of any Registration Statement, the Company shall
notify each Investor of the information the Company requires from such Investor
if such Investor elects to have any of the Registrable Securities included
in
the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities included in the Registration
Statement.
(b) Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate
with the Company as reasonably requested by the Company in connection with
the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all
of
its Registrable Securities from such Registration Statement.
(c) Each
Investor agrees that, upon receipt of any notice from the Company of either
(i)
the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(h) hereof, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the Investor
is advised by the Company that such dispositions may again be made.
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6. Indemnification.
(a) Indemnification
by the Company. The Company will indemnify and hold harmless each
Investor and its officers, directors, members, employees and agents, successors
and assigns, and each other person, if any, who controls such Investor within
the meaning of the 1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, any preliminary Prospectus or final Prospectus, or any amendment
or
supplement thereof; (ii) any blue sky application or other document executed
by
the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order
to
qualify any or all of the Registrable Securities under the securities laws
thereof (any such application, document or information herein called a “Blue Sky
Application”); (iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading; (iv) any violation by the Company or
its
agents of any rule or regulation promulgated under the 1933 Act applicable
to
the Company or its agents and relating to action or inaction required of the
Company in connection with such registration; or (v) any failure to register
or
qualify the Registrable Securities included in any such Registration Statement
in any state where the Company or its agents has affirmatively undertaken or
agreed in writing that the Company will undertake such registration or
qualification on an Investor’s behalf and will reimburse such Investor, and each
such officer, director or member and each such controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and
to
the extent that any such loss, claim, damage or liability arises out of or
is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Investor or any such controlling person in writing specifically for use in
such
Registration Statement or Prospectus.
(b) Indemnification
by the Investors. Each Investor agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by
law,
the Company, its directors, officers, employees, stockholders and each person
who controls the Company (within the meaning of the 0000 Xxx) against any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from any untrue statement of a material fact or any omission
of
a material fact required to be stated in the Registration Statement or
Prospectus or preliminary Prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but
only
to the extent that such untrue statement or omission is contained in any
information furnished in writing by such Investor to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto. In no event shall the liability of an Investor be
greater in amount than the dollar amount of the proceeds (net of all expense
paid by such Investor in connection with any claim relating to this Section
6
and the amount of any damages such Investor has otherwise been required to
pay
by reason of such untrue statement or omission) received by such Investor upon
the sale of the Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.
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(c) Conduct
of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying
party
of any claim with respect to which it seeks indemnification and (ii) permit
such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to employ separate counsel
and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying
party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims
(in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of
such claim on behalf of such person); and provided, further, that
the failure of any indemnified party to give notice as provided herein shall
not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation. It
is understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than
one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of such claim or litigation.
(d) Contribution. If
for any reason the indemnification provided for in the preceding paragraphs
(a)
and (b) is unavailable to an indemnified party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying
party
shall contribute to the amount paid or payable by the indemnified party as
a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable
considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a
holder of Registrable Securities be greater in amount than the dollar amount
of
the proceeds (net of all expenses paid by such holder in connection with any
claim relating to this Section 6 and the amount of any damages such holder
has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of
the
Registrable Securities giving rise to such contribution obligation.
7. Miscellaneous.
(a) Amendments
and Waivers. This Agreement may be amended only by a writing
signed by the Company and the Required Investors. The Company may
take any action herein prohibited, or omit to perform any act herein required
to
be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the Required
Investors.
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(b) Notices. All
notices and other communications provided for or permitted hereunder shall
be
made as set forth in Section 9.4 of the Purchase Agreement.
(c) Assignments
and Transfers by Investors. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Investors and their
respective successors and assigns. An Investor may transfer or
assign, in whole or from time to time in part, to one or more persons its rights
hereunder in connection with the transfer of Registrable Securities by such
Investor to such person, provided that such Investor complies with all laws
applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected.
(d) Assignments
and Transfers by the Company. This Agreement may not be assigned
by the Company (whether by operation of law or otherwise) without the prior
written consent of the Required Investors, provided, however, that the Company
may assign its rights and delegate its duties hereunder to any surviving or
successor corporation in connection with a merger or consolidation of the
Company with another corporation, or a sale, transfer or other disposition
of
all or substantially all of the Company’s assets to another corporation, without
the prior written consent of the Required Investors, after notice duly given
by
the Company to each Investor.
(e) Benefits
of the Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts;
Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile (including via electronic transmission of
scanned documents), which shall be deemed an original.
(g) Titles
and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(h) Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision
of
law which renders any provisions hereof prohibited or unenforceable in any
respect.
-10-
(i) Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and
to
evidence the fulfillment of the agreements herein contained.
(j) Entire
Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of
the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District
of
New York for the purpose of any suit, action, proceeding or judgment relating
to
or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to
the
laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
-11-
IN
WITNESS WHEREOF, the parties have
executed this Agreement or caused their duly authorized officers to execute
this
Agreement as of the date first above written.
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The
Company:
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By:
/s/ Xxxxxx X. Xxxxxxxxxx
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Name:
Xxxxxx X. Xxxxxxxxxx
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Title:
Chief Executive Officer
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-12-
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The
Investors:
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SRB
GREENWAY CAPITAL, L.P.
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By: SRB
Management, L.P., General Partner
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By: BC
Advisors, L.L.C., General Partner
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By: /s/
Xxxxxx X. Xxxxxx
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Name: Xxxxxx
X. Xxxxxx
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Title: Member
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SRB
GREENWAY CAPITAL (Q.P.), L.P.
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By: SRB
Management, L.P., General Partner
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By: BC
Advisors, L.L.C., General Partner
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By: /s/
Xxxxxx X. Xxxxxx
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Name: Xxxxxx
X. Xxxxxx
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Title: Member
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SRB
GREENWAY OFFSHORE
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OPERATING
FUND, L.P.
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By: SRB
Management, L.P., General Partner
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By: BC
Advisors, L.L.C., General Partner
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By: /s/
Xxxxxx X. Xxxxxx
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Name: Xxxxxx
X. Xxxxxx
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Title: Member
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-13-
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Xxxxx
X. Xxxxxx, III
/s/
Xxxxx X. Xxxxxx, III
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Xxxxx
X. Xxxxxx, III
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MILFAM
II, LP
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By:
Milfam LLC, its General Partner
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By:
/s/ Xxxxx X. Xxxxxx, III
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Name: Xxxxx
X. Xxxxxx, III
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Title: Manager
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-00-
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XXXXXXX
XXXXXXX XXXX.
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By:
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx
X. Xxxxx
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Title: Chairman
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CLARION
WORLD OFFSHORE FUND, LTD.
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By:
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx
X. Xxxxx
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Title: Investment
Manager
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THE
AMENDED & RESTATED DECLARATION OF
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TRUST
OF XXXXXX X. XXXXX, DATED MAY 9, 2005
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By:
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx
X. Xxxxx
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Title: Trustee
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SHAKER
INVESTMENTS TOWER, L.P.
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By:
/s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx
Xxxxxxxxxx
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Title: Managing
Member
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-15-
Exhibit
A
Plan
of Distribution
The
selling stockholders, which as used
herein includes donees, pledgees, transferees or other successors-in-interest
selling shares of common stock or interests in shares of common stock received
after the date of this prospectus from a selling stockholder as a gift, pledge,
partnership distribution or other transfer, may, from time to time, sell,
transfer or otherwise dispose of any or all of their shares of common stock
or
interests in shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private
transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale,
or at
negotiated prices.
The
selling stockholders may use any
one or more of the following methods when disposing of shares or interests
therein:
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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;
-
short sales effected after the date
the registration statement of which this Prospectus is a part is declared
effective by the SEC, subject to the restrictions on short selling contained
in
the purchase agreement relating to the placement of the shares covered
hereby;
-
through the writing or settlement of
options or other hedging transactions, whether through an options exchange
or
otherwise;
-
broker-dealers may agree with the
selling stockholders to sell a specified number of such shares at a stipulated
price per share; and
-
a combination of any such methods of
sale.
The
selling stockholders may, from time
to time, pledge or grant a security interest in some or all of the shares of
common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the
shares of common stock, from time to time, under this prospectus, or under
an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the
-16-
list
of
selling stockholders to include the pledgee, transferee or other successors
in
interest as selling stockholders under this prospectus. The selling
stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
In
connection with the sale of our
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 our 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
aggregate proceeds to the selling
stockholders from the sale of the common stock offered by them will be the
purchase price of the common stock less discounts or commissions, if
any. Each of the selling stockholders reserves the right to accept
and, together with their agents from time to time, to reject, in whole or in
part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering.
Upon any exercise of the warrants by payment of cash, however, we will receive
the exercise price of the warrants.
The
selling stockholders also may
resell all or a portion of the shares in open market transactions in reliance
upon Rule 144 under the Securities Act of 1933, provided that they meet the
criteria and conform to the requirements of that rule.
The
selling stockholders and any
underwriters, broker-dealers or agents that participate in the sale of the
common stock or interests therein may be "underwriters" within the meaning
of
Section 2(11) of the Securities Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting
discounts and commissions under the Securities Act. Selling
stockholders who are "underwriters" within the meaning of Section 2(11) of
the
Securities Act will be subject to the prospectus delivery requirements of the
Securities Act.
To
the extent required, the shares of
our common stock to be sold, the names of the selling stockholders, the
respective purchase prices and public offering prices, the names of any agents,
dealer or underwriter, any applicable commissions or discounts with respect
to a
particular offer will be set forth in an accompanying prospectus supplement
or,
if appropriate, a post-effective amendment to the registration statement that
includes this prospectus.
In
order to comply with the securities
laws of some states, if applicable, the common stock may be sold in these
jurisdictions only through registered or licensed brokers or
dealers. In addition, in some states the common stock may not be sold
unless it has been registered or
-17-
qualified
for sale or an exemption from registration or qualification requirements is
available and is complied with.
We
have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the Exchange
Act may apply to sales of shares in the market and to the activities of the
selling stockholders and their affiliates. In addition, to the extent
applicable we will make copies of this prospectus (as it may be supplemented
or
amended from time to time) available to the selling stockholders for the purpose
of satisfying the prospectus delivery requirements of the Securities
Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities
Act.
We
have agreed to indemnify the selling
stockholders against liabilities, including liabilities under the Securities
Act
and state securities laws, relating to the registration of the shares offered
by
this prospectus.
We
have agreed with the selling
stockholders to keep the registration statement of which this prospectus
constitutes a part effective until the earlier of (1) such time as all of the
shares covered by this prospectus have been disposed of pursuant to and in
accordance with the registration statement, (2) the date on which the shares
may
be sold pursuant to Rule 144(k) of the Securities Act and (3) the third
anniversary of the initial effective date of the registration statement of
which
this prospectus constitutes a part.
-18-
