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EXHIBIT 10.7(d)
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
December 3, 1997, is made and entered into between COMPRESSANT CORPORATION, a
Florida corporation (the "Company"), and KINGSBRIDGE CAPITAL LIMITED (the
"Investor").
WHEREAS, the Company and the Investor have entered into that certain
Private Equity Line of Credit Agreement, dated as of the date hereof (the
"Investment Agreement"), pursuant to which the Company will issue, from time to
time, to the Investor up to $10,000,000 worth of shares of Common Stock, par
value $.001 per share, of the Company (the "Common Stock");
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor entering into the Investment Agreement, the Company has issued to
the Investor a warrant dated December 3, 1997, exercisable from time to time
within three (3) years following the six-month anniversary of the date of
issuance (the "Warrant") for the purchase of an aggregate of 45,000 shares of
Common Stock at a price specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Investment Agreement, the Company
has agreed to provide the Investor with certain registration rights with
respect to the Registrable Securities;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, and in
the Investment Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be
legally bound hereby, the parties hereto agree as follows (capitalized terms
used herein and not defined herein shall have the meaning ascribed to them in
the Investment Agreement):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. FORM S-3 REGISTRATION STATEMENTS.
(a) Filing of Form S-3 Registration Statements. Subject to
the terms and conditions of this Agreement, the Company shall file with the
within forty-five (45) days following the Subscription Date a registration
statement on Form S-3 under the Securities Act (the "Registration Statement")
for the registration of the resale by the Investor of the Registrable
Securities.
(b) Effectiveness of the Registration Statement. The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC by no later than ninety
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(90) days after Subscription Date and to insure that the Registration Statement
remains in effect throughout the term of this Agreement as set forth in Section
4.2.
(c) Failure to Obtain Effectiveness of Registration Statements. In
the event the Company fails for any reason to obtain the effectiveness of a
Registration Statement within the time period set forth in Section 1.1(b), the
Company shall pay to the Investor, within three Trading Days of the date by
which such Registration Statement was required to have been declared effective,
$10,000 in immediately available funds into an account designated by the
Investor; provided, however, that such amount shall not be payable with respect
to the postponement of the effectiveness of a Registration Statement (or use of
the underlying prospectus) pursuant to Section 1.1(f). Such payment shall be
made by wire transfer of immediately available funds.
(d) Failure to Maintain Effectiveness of Registration Statements. In
the event the Company fails to maintain the effectiveness of a Registration
Statement (or the underlying prospectus) throughout the period set forth in
Section 4.2, other than temporary suspensions as set forth in Section 1.1(f),
and the Investor holds any Registrable Securities at any time during the period
of such ineffectiveness (an "Ineffective Period"), the Company shall pay to the
Investor in immediately available funds into an account designated by the
Investor an amount equal to one half of one percent (0.5%) of the aggregate
Purchase Price of all of the Registrable Securities then held by the Investor
for the each of the first four seven-calendar-day periods (or portion thereof)
of an Ineffective Period and one percent (1.0%) of such aggregate Purchase Price
for each subsequent seven-calendar-day periods (or portion thereof) of such
Ineffective Period. Such amounts shall not be payable with respect to
suspensions of the effectiveness of a Registration Statement (or use of the
underlying prospectus), in accordance with Section 1.1(f). Such payments shall
be made on the first Trading Day after the earliest to occur of (i) the
expiration of the Commitment Period, (ii) the expiration of an ineffective
Period, (iii) the expiration of the first twenty-eight calendar days of an
Ineffective Period and (iv) the expiration of each additional twenty-eight
calendar-day period during an Ineffective Period.
(e) SEC Disapproval. Sections 1.1 (b) and (c) notwithstanding, the
date by which a Registration Statement is required to become effective shall be
extended for up to sixty (60) days without penalty in the event the failure to
obtain effectiveness of a Registration Statement by no later than ninety (90)
days after Subscription Date results solely from the SEC's disapproval of the
structure of the transactions contemplated by the Investment Agreement. In such
event, the parties agree to cooperate with one another in good faith to arrive
at a resolution acceptable to the SEC and the parties hereto and no penalty
shall be payable under this Agreement if the parties are unable to arrive at
such a resolution.
(f) Deferral and Suspension. Sections 1.1(c) and (d)
notwithstanding, if the Company shall furnish to the Investor notice signed by
the Chairman and Chief Executive Officer of the Company stating that the Board
of Directors of the Company has, by duly authorized resolution, determined in
good faith that it would be seriously detrimental to the Company and its
shareholders for the Registration Statement to be filed (or remain in effect)
and it is therefore essential to defer the filing of such Registration Statement
(or temporarily suspend the effectiveness of such Registration Statement or use
of the related prospectus), the Company shall
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have the right to defer such filing (or suspend such effectiveness) immediately
for a period of not more than thirty (30) days beyond such the date by which
such Registration Statement was otherwise required to be filed (or required to
remain in effect). The Investor acknowledges that it would be seriously
detrimental to the Company and its shareholders for such Registration Statement
to be filed (or remain in effect) and therefore essential to defer such filing
(or suspend such effectiveness) and agrees to cease any disposition of the
Registrable Securities immediately upon receipt of such notice. The Company may
not utilize any of its rights under this Section 1.1(f) to defer the filing of a
Registration Statement (or suspend its effectiveness) more than twice in any
twelve (12) month period. Following such deferral or suspension, the Investor
shall be entitled to such additional number of shares of Common Stock as set
forth in Section 2.7 of the Investment Agreement.
(g) The parties hereto acknowledge and agree that the sums payable
under Sections 1(c) or 1(d) above shall constitute liquidated damages and not
penalties. The parties further acknowledge that (a) the amount of loss or
damages likely to be incurred is incapable or is difficult to precisely
estimate, (b) the amounts specified in such Sections bear a reasonable
proportion and are not plainly or grossly disproportionate to the probable loss
likely to be incurred in connection with any failure by the Company to obtain or
maintain the effectiveness of a Registration Statement, (c) one of the reasons
for the Parties reaching an agreement as to such amounts was the uncertainty
and cost of litigation regarding the question of actual damages, and (d) the
parties are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this
Agreement at arm's length.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company will effect the registration
and sale of such Registrable Securities in accordance with the intended methods
of disposition thereof. Without limiting the foregoing, the Company in each
such case will do the following as expeditiously as possible, but in not event
later than the deadline, if any, prescribed therefor in this Agreement:
(a) The Company shall prepare and file with the SEC a registration
statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement and in accordance with the intended method of
distribution of such Registrable Securities); use reasonable best efforts to
cause such filed Registration Statement to become and remain effective (pursuant
to Rule 415 under the Act or otherwise); prepare and file with the SEC such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective for the time periods prescribed by Section 1.1(b); and
comply with the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the Investor set forth in
such Registration Statement.
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(b) The Company shall file all necessary amendments to the
Registration Statement in order to effectuate the purpose of this Agreement,
the Investment Agreement, and the Warrant.
(c) If so requested by the managing underwriters, if any, or
the holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection with the filing of a Shelf Registration,
the Company shall (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
and such holders agree should be included therein, and (ii) make all required
filings of such prospectus supplement or post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 2.1(c)(ii) that would, in the opinion of counsel for
the Company, violate applicable law.
(d) In connection with the filing of a shelf registration, the
Company shall enter into such agreements and take all such other reasonable
actions in connection therewith (including those reasonably requested by the
managing underwriters, if any, or the holders of a majority in aggregate
principal amount of the Registrable Securities being sold) in order to expedite
or facilitate the disposition of such Registrable Securities, and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make such
representations and warranties to the holders of such Registrable Securities
and the underwriters, if any, with respect to the business of the Company
(including with respect to businesses or assets acquired or to be acquired by
the Company), and the Registration Statement, prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
in form, substance and scope as are customarily made by issuers to underwriters
in underwritten offerings, and confirm the same if and when requested; (ii) if
an underwriting agreement is entered into, the same shall contain
indemnification provision and procedures no less favorable to the selling
holders of such Registrable Securities and the underwriters, if any, than those
set forth herein (or such other provisions and procedures acceptable to the
holders of a majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing underwriters, if any);
and (iii) deliver such documents and certificates as may be reasonably
requested by the holders of a majority in aggregate principal amount of the
Registrable Securities being sold, their counsel and the managing underwriters,
if any, to evidence the continued validity of their representations and
warranties made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(e) Five Trading Days prior to filing a Registration Statement
or prospectus, or any amendment or supplement thereto (excluding amendments
deemed to result from the filing of documents incorporated by reference
therein), the Company shall deliver to the Investor and one firm of counsel
representing the Investor, in accordance with the notice provisions of Section
4.8, copies of such Registration Statement as proposed to be filed, together
with exhibits thereto, which documents will be subject to review by such
parties, and thereafter deliver to the Investor and its counsel, in accordance
with the notice provisions of Section 4.8, such number of copies
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of such Registration Statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary prospectus) and such other
documents or information as the Investor or counsel may reasonably request in
order to facilitate the disposition of the Registrable Securities.
(f) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
such Registration Statement such number of conformed copies of such
Registration Statement and of each amendment and supplement thereto (in each
case including all exhibits and documents incorporated by reference), such
number of copies of the prospectus contained in such Registration Statement
(including each preliminary prospectus and any summary prospectus) and any
other prospectus file under Rule 424 promulgated under the Securities Act
relating to such seller's Registrable Securities, and such other documents, as
such seller may reasonably request to facilitate the disposition of its
Registrable Securities.
(g) After the filing of the Registration Statement, the Company
shall promptly notify the Investor of any stop order issued or threatened by
the SEC in connection therewith and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
(h) The Company shall use its reasonable best efforts to (i)
register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as the Investor may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be reasonably necessary or advisable to
enable the Investor to consummate the disposition of the Registrable Securities;
provided that the Company will not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (h), subject itself to taxation in any such
jurisdiction, or consent or subject itself to general service of process in any
such jurisdiction.
(i) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of any offering of Registrable Securities; (i)
receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to the Registration
Statement or related prospectus; (ii) the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iii) receipt 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; (iv) the happening of any event
that makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so
that, in the case
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of the Registration Statement, 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 not misleading, and that in the
case of the related prospectus, 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; and (v) the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate; and the Company will promptly make available to the
Investor any such supplement or amendment to the related prospectus.
(j) The Company shall enter into customary agreements and take
such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities (whereupon the
Investor may, at its option, require that any or all of the representations,
warranties and covenants of the Company also be made to and for the benefit of
the Investor).
(k) The Company shall make available to the Investor (and will
deliver to Investor's counsel), subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all correspondence between the SEC and the Company, its counsel or auditors and
will also make available for inspection by the Investor and any attorney,
accountant or other professional retained by the Investor (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with such
Registration Statement. Records that the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such Registration
Statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent
jurisdiction or other process; provided that prior to any disclosure or release
pursuant to clause (ii), the Inspectors shall provide the Company with prompt
notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive such Inspectors' obligation not to
disclose such Records; and, provided further, that if failing the entry of a
protective order or the waiver by the Company permitting the disclosure or
release of such Records, the Inspectors, upon advice of counsel, are compelled
to disclose such Records, the Inspectors may disclose that portion of the
Records which counsel has advised the Inspectors that the Inspectors are
compelled to disclose. The Investor agrees that information obtained by it
solely as a result of such inspections (not including any information obtained
from a third party who, insofar as is known to the Investor after reasonable
inquiry, is not prohibited from providing such information by a contractual,
legal or fiduciary obligation to the Company) shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its Affiliates unless and until such information
is made generally available to the public. The Investor further agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
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(l) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to the Investor a signed counterpart, addressed to
the Investor, of (1) an opinion or opinions of counsel to the Company, and (2)
a comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Investor reasonably requests.
(m) The Company shall otherwise comply with all applicable rules
and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
(n) The Company shall appoint a transfer agent and registrar for
all such Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.
(o) The Company may require the Investor to promptly furnish in
writing to the Company such information as may be legally required in
connection with such registration including, without limitation, all such
information as may be requested by the SEC or the National Association of
Securities Dealers. The Investor agrees to provide such information requested
in connection with such registration within ten (10) business days after
receiving such written request and the Company shall not be responsible for any
delays in obtaining or maintaining the effectiveness of the Registration
Statement caused by the Investor's failure to timely provide such information.
Section 2.2 REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation, (i) all registration, filing, securities
exchange listing and fees required by the National Association of Securities
Dealers, (ii) all registration, filing, qualification and other fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi)
reasonable fees and disbursements of counsel for the Company and customary fees
and expenses for independent certified public accountants retained by the
Company (including the expenses of any special audits or comfort letters or
costs associated with the delivery by independent certified public accountants
of such special audit(s) or comfort letter(s) requested pursuant to Section
2.1(h) hereof), (vii) the fees and expenses of any special experts retained by
the Company in connection with such registration, (viii) all reasonable fees
and expenses of one firm of counsel for the Investor retained as the Investor's
counsel with respect to such Registration Statement (an estimate of such fees
and expenses of such firm of counsel to be provided to the Company prior to the
undertaking of such counsel's review), (ix) premiums and other costs of
policies of insurance against liabilities arising out of any public offering of
the Registrable Securities being registered, and (x) any fees and disbursements
of underwriters customarily paid by issuers or sellers of securities, but
excluding underwriting fees, discounts,
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transfer taxes or commissions, if any, attributable to the sale of Registrable
Securities, which shall be payable by each holder of Registrable Securities pro
rata on the basis of the number of Registrable Securities of each such holder
that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless the Investor, its partners, Affiliates, officers, directors,
employees and duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"), from and against any
loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements and costs and expenses
of investigating and defending any such claim) (collectively, "Damages"), joint
or several, and any action or proceeding in respect thereof to which the
Investor, its partners, Affiliates, officers, directors, employees and duly
authorized agents, and any such Controlling Person may become subject under the
Act or otherwise as incurred and, insofar as such Damages (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or prospectus relating to the Registrable Securities or
any preliminary prospectus, or arises out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are based upon information furnished in writing to the Company by the
Investor expressly for use therein, and shall reimburse the Investor, its
partners, Affiliates, officers, directors, employees and duly authorized agents,
and each such Controlling Person for any legal and other expenses reasonably
incurred by the Investor, its partners, Affiliates, officers, directors,
employees and duly authorized agents, or any such Controlling Person, as
incurred, in investigating or defending or preparing to defend against any such
Damages or actions or proceedings; provided, however, that the Company shall not
be liable to the Investor to the extent that any such Damages arise out of or
are based upon an untrue statement or omission made in any preliminary
prospectus if (i) the Investor failed to send or deliver a copy of the final
prospectus delivered by the Company to the Investor with or prior to the
delivery of written confirmation of the sale by the Investor to the Person
asserting the claim from which such Damages arise, and (ii) the final prospectus
would have corrected such untrue statement or such omission or alleged omission.
Section 3.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
any person or entity in respect of which indemnity may be sought pursuant to
Section 3.1 (an "Indemnified Party") of notice of any claim or the commencement
of any action, the Indemnified Party shall, if a claim in respect thereof is to
be made against the person or entity against whom such indemnity may be sought
(the "Indemnifying Party"), notify the Indemnifying Party in writing of the
claim or the commencement of such action; in the event an Indemnified Party
shall fail to give such notice as provided in this Section 3.2 and the
Indemnifying Party to whom
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notice was not given was unaware of the proceeding to which such notice would
have related and was materially prejudiced by the failure to give such notice,
the indemnification provided for in Section 3.1 shall be reduced to the extent
of any actual prejudice resulting from such failure to so notify the
Indemnifying Party; provided, that the failure to notify the Indemnifying Party
shall not relieve it from any liability that it may have to an Indemnified
Party otherwise than under Section 3.1. If any such claim or action shall be
brought against an Indemnified Party, and it shall notify the Indemnifying
Party thereof, the Indemnifying Party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided that the Indemnified Party shall have the right to
employ separate counsel to represent the Indemnified Party and its controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Indemnified Party against the Indemnifying
Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of the Company and such Indemnified Party, representation
of both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest between them, it being understood, however,
that the Indemnifying Party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims or actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for all
Indemnified Parties, or for fees and expenses that are not reasonable. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any claim or pending or threatened proceeding
in respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability arising out of such claim or proceeding. Whether or not the
defense of any claim or action is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, which consent will not be unreasonably withheld.
Section 3.3. OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article 3 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act. The provisions of this Article III
shall be in addition to any other rights to indemnification, contribution or
other remedies which an Indemnified Party may have pursuant to law, equity,
contract or otherwise.
Section 3.4. CONTRIBUTION. If the indemnification provided for in this
Article III is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then the 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 Damages as between the
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Company on the one hand and the Investor on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of the Investor in
connection with such statements or omissions, as well as other equitable
considerations. The relative fault of the Company on the one hand and of the
Investor on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Investor agree that it would not be just and equitable if
contribution pursuant to this Section 3.4 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified party as a result of
the Damages referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 3.4, the Investor shall in no event be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of the Investor were sold to the public (less
underwriting discounts and commissions) exceeds the amount of any damages which
the Investor has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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.
ARTICLE IV
MISCELLANEOUS
Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. The Company represents and
warrants to the Investor that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such
securities under the Securities Act or any securities or blue sky laws of any
jurisdiction that would conflict or be inconsistent with any provision of this
Agreement or the Investment Agreement.
Section 4.1. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as all Call
Shares (i) have been disposed of pursuant to the Registration Statement, (ii)
have been sold under circumstances under which all of the applicable conditions
of Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (iii) have been otherwise transferred to holders who may
trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for
such securities not bearing a restrictive legend, or (iv) may be sold without
any time, volume or manner limitations pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act in the opinion of counsel to
the Company, which counsel shall be reasonably acceptable to the Investor;
provided, however, that
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such registration rights shall not terminate sooner than two years following
the Subscription Date. Notwithstanding the foregoing, paragraphs (c) and (d) of
Section 1.1, Article III, Section 4.8, and Section 4.9 shall survive the
termination of this Agreement.
Section 4.3 RULE 144. The Company covenants that it will file all reports
required to be filed by it under the Act and the Exchange Act and that it will
take such further action as holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable the Investor to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. If at any time the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities,
make publicly available other information so long as necessary to permit sales
pursuant to Rule 144. Upon the request of the Investor, the Company will
deliver to Investor a written statement as to whether it has complied with such
requirements.
Section 4.4 CERTIFICATE. The Company will, at its expense, forthwith upon
the request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual
report required to be filed thereunder.
Section 4.5 AMENDMENT AND MODIFICATION. Any provision of this Agreement may
be waived, provided that such waiver is set forth in a writing executed by both
parties to this Agreement. 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 Company has obtained the written consent of the holders of a
majority of the then outstanding Registrable Securities. Notwithstanding the
foregoing, the waiver of any provision hereof with respect to a matter that
relates exclusively to the rights of holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and does not
directly or indirectly affect the rights of other holders of Registrable
Securities may be given by holders of at least a majority of the Registrable
Securities being sold by such holders; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. No course of dealing
between or among any Person having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.
Section 4.6 SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and all their respective successors and assigns. The Investor
may assign its rights under this Agreement to any subsequent holder of the
Registrable Securities, provided that the Company shall have the right to
require any holder of Registrable Securities to execute a counterpart of this
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Agreement as a condition to such holder's claim to any rights hereunder. This
Agreement, together with the Investment Agreement and the Warrants sets forth
the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
Section 4.7 SEPARABILITY. In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid
or otherwise unenforceable by a court of competent jurisdiction, the remainder
of this Agreement shall not be affected except to the extent necessary to
delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
Section 4.8 NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
deliver, telegram or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, 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 (b) 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:
if to Compressent Corporation: Xxxxxxx Xxxxxxxxx
Chairman and Chief Executive Officer
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000-0000
Fax No. (000) 000-0000
with a copy to: Xxxx Xxxxxxx, Esq.
(shall not constitute notice) Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Fax No. (000) 000-0000
if to the Investor: Xxxx Xxxxxx
Kingsbridge Capital Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Fax No. 000 00 000 000
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with a copy to: Xxxx Xxxxx, Esq.
(shall not constitute notice) Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No. (000) 000-0000
Either party hereto may from time to time change its address or facsimile
number for notice under this Section 4.8 by giving at least ten (10) days'
prior written notice of such changed address or facsimile number to the other
party hereto.
Section 4.9 GOVERNING LAW. This Agreement shall be construed under the laws
of the State of California, without giving effect to provision regarding
conflicts of law or choice of law.
Section 4.10 HEADINGS. The headings in this Agreement are for convenience of
reference and shall not constitute a part of this agreement, nor shall they
affect their meaning, construction or effect.
Section 4.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute one and the same instrument.
Section 4.12 FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 4.13 REMEDIES. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection to any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
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IT WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
COMPRESSENT CORPORATION
By: /s/ XXXXXXX XXXXXXXXX
--------------------------------
Xxxxxxx Xxxxxxxxx
Chairman and Chief Executive
Officer
KINGSBRIDGE CAPITAL LIMITED
By:
---------------------------------
Xxxx Xxxxxx
Director
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IT WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
COMPRESSENT CORPORATION
By:
--------------------------------
Xxxxxxx Xxxxxxxxx
Chairman and Chief Executive
Officer
KINGSBRIDGE CAPITAL LIMITED
By: /s/ XXXX XXXXXX
---------------------------------
Xxxx Xxxxxx
Director
