Exhibit 10.32
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of July 26, 2001 between
Grenville Finance Ltd. ("Purchaser") and Data Race, Inc. (the "Company").
WHEREAS, simultaneously with the execution and delivery of this Agreement,
the parties shall enter into the Common Stock Purchase Agreement, dated as of
the date hereof, (the "Purchase Agreement") pursuant to which the Purchaser has
committed to purchase up to $30,000,000 of the Company's Common Stock (terms not
defined herein shall have the meanings ascribed to them in the Purchase
Agreement) and the Warrant; and
WHEREAS, the execution and delivery of this Agreement and granting to the
Purchaser of the registration rights set forth herein with respect to the Shares
is a component part of the transaction contemplated under the Purchase
Agreement.
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term "Registrable
Security" means all Shares that (i) have not been sold under the Registration
Statement, (ii) have not 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 not been otherwise
transferred to persons 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 Shares not bearing a restrictive legend, or (iv)
may not 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 event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be deemed to be made in the definition of "Registrable Security" as is
appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Agreement.
Section 2. Restrictions on Transfer. The Purchaser acknowledges and
understands that in the absence of an effective Registration Statement
authorizing the resale of the Shares as provided herein, the Shares are
"restricted securities" as defined in Rule 144. The Purchaser understands that
no disposition or transfer of the Shares may be made by Purchaser in the absence
of (i) an opinion of counsel to the Purchaser, in form and substance reasonably
satisfactory to the Company, that such transfer may be made without registration
under the Securities Act or (ii) such registration.
With a view to making available to the Purchaser the benefits of Rule 144,
the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144; and
(b) to file with the Commission in a timely manner all reports and
other documents required to be filed by the Company pursuant to Section 13
or 15(d) under the Exchange Act; and, if at any time it is not required to
file such reports but in the past had been required to or did file such
reports, it will, upon the request of the Purchaser, make
available other information as required by, and so long as necessary to
permit sales of, its Registrable Securities pursuant to Rule 144.
Section 3. Registration Rights With Respect to the Shares.
(a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within forty-five (45)
days after the date hereof, a registration statement (on Form S-3 and/or
SB-2, or other appropriate form of registration statement) under the
Securities Act (the "Registration Statement"), at the sole expense of the
Company (except as provided in Section 3(c) hereof), so as to permit a
public offering and resale of the Shares under the Securities Act by
Purchaser.
(b) The Company shall use its best efforts to cause the Registration
Statement to become effective within the earlier of (i) one hundred and
twenty (120) days of the date of filing the Registration Statement, or (ii)
five (5) days after receiving written notice of SEC clearance and will
within said five (5) days request acceleration of effectiveness. The
Company will notify Purchaser of the effectiveness of the Registration
Statement within one Trading Day of such event.
(c) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 hereof effective under
the Securities Act until the earliest of (i) the date that all the
Registrable Securities have been disposed of pursuant to the Registration
Statement, (ii) the date that all of the Registrable Securities have been
sold pursuant to the Registration Statement, (iii) the date that all of the
Registrable Securities have been otherwise transferred to persons 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 Shares not bearing a restrictive legend, (iv) the date that all of the
Registrable Securities 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 Purchaser (the "Effectiveness
Period").
(d) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of
the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The
Purchaser shall bear the cost of underwriting and/or brokerage discounts,
fees and commissions, if any, applicable to the Shares being registered and
the fees and expenses of its counsel.
(e) The Purchaser and its counsel shall have a reasonable period, not
to exceed ten (10) Trading Days, to review the proposed Registration
Statement or any amendment thereto, prior to filing with the Commission,
and the Company shall provide the Purchaser with copies of any comment
letters received from the Commission with respect thereto within two (2)
Trading Days of receipt thereof.
(f) The Company shall make reasonably available for inspection by
Purchaser, any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent
retained by the Purchaser or any
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such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by the Purchaser or any such underwriter,
attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence
examinations; provided, however, that all records, information and
documents that are designated in writing by the Company, in good faith, as
confidential, proprietary or containing any material non-public information
shall be kept confidential by the Purchaser and any such underwriter,
attorney, accountant or agent, unless such disclosure is made pursuant to
judicial process in a court proceeding (after first giving the Company an
opportunity promptly to seek a protective order or otherwise limit the
scope of the information sought to be disclosed) or is required by law, or
such records, information or documents become available to the public
generally or through a third party not in violation of an accompanying
obligation of confidentiality. If the foregoing inspection and information
gathering would otherwise disrupt the Company's conduct of its business,
such inspection and information gathering shall, to the maximum extent
possible, be coordinated on behalf of the Purchaser and the other parties
entitled thereto by one firm of counsel designed by and on behalf of the
majority in interest of Purchaser and other parties.
(g) The Company shall qualify any of the Shares for sale in such
states as the Purchaser reasonably designates and shall furnish
indemnification in the manner provided in Section 6 hereof. However, the
Company shall not be required to qualify in any state which will require an
escrow or other restriction relating to the Company and/or the sellers, or
which will require the Company to qualify to do business in such state or
require the Company to file therein any general consent to service of
process.
(h) The Company at its expense will supply the Purchaser with copies
of the Registration Statement and the final prospectus included therein
(the "Prospectus") and other related documents in such quantities as may be
reasonably requested by the Purchaser.
(i) The Company shall not be required by this Section 3 to include the
Purchaser's Shares in any Registration Statement which is to be filed if,
in the opinion of counsel for both the Purchaser and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Purchaser and the
Company) the proposed offering or other transfer as to which such
registration is requested is exempt from applicable federal and state
securities laws and would result in all purchasers or transferees obtaining
securities which are not "restricted securities", as defined in Rule 144
under the Securities Act.
(j) If at any time or from time to time after the effective date of
the Registration Statement, the Company notifies the Purchaser in writing
of the existence of a Potential Material Event (as defined in Section 3(k)
below), the Purchaser shall not offer or sell any Shares or engage in any
other transaction involving or relating to Shares, from the time of the
giving of notice with respect to a Potential Material Event until the
Purchaser receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer
constitutes a Potential Material Event (the "Suspension Period").
Notwithstanding anything herein to the contrary, if a Suspension Period
occurs at any time during any period commencing on a Trading Day a
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Draw Down Notice is deemed delivered and ending ten (10) Trading Days
following the end of the corresponding Draw Down Pricing Period, then the
Company must compensate the Purchaser for any net decline in the market
value of any Shares purchased, or committed to be purchased, by the
Purchaser pursuant to such recent Draw Down Pricing Period through the end
of such Suspension Period. Net decline shall be calculated as the
difference between the highest VWAP during the applicable Suspension Period
and the VWAP on the Trading Day immediately following a properly delivered
notice to the Purchaser that such Suspension Period has ended. If a
Potential Material Event shall occur prior to the date the Registration
Statement is filed, then the Company's obligation to file the Registration
Statement shall be delayed without penalty for not more than thirty (30)
calendar days. The Company must give Purchaser notice in writing of the
existence of a Potential Material Event promptly upon knowledge that such
an event exists and, where possible, at least two (2) days prior to the
first day of a Suspension Period, if lawful to do so.
(k) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information that is not ripe for
disclosure in a registration statement, as determined in good faith by the
Chief Executive Officer or the Board of Directors of the Company or that
disclosure of such information in the Registration Statement would be
detrimental to the business and affairs of the Company; (ii) any material
engagement or activity by the Company which would, in the good faith
determination of the Chief Executive Officer or the Board of Directors of
the Company, be adversely affected by disclosure in a registration
statement at such time, which determination shall be accompanied by a good
faith determination by the Chief Executive Officer or the Board of
Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information, or (iii)
pursuant to applicable law, the Company is required to file a
post-effective amendment to the Registration Statement because the Company
experiences a fundamental change, must change the plan of distribution to
the Prospectus, or must update the information included in the Prospectus
pursuant to Section 10(a)(3) of the Securities Act.
Section 4. Cooperation with Company. The Purchaser will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Purchaser and proposed manner of sale of
the Registrable Securities required to be disclosed in the Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing its obligations under any underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering. The
Purchaser shall consent to be named as an underwriter in the Registration
Statement. The Purchaser acknowledges that in accordance with current Commission
policy, the Purchaser will be named as the underwriter of the Shares in the
Registration Statement.
Section 5. Registration Procedures. If and whenever the Company is required
by any of the provisions of this Agreement to effect the registration of any of
the Registrable Securities under the Securities Act, the Company shall (except
as otherwise provided in this
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Agreement), as expeditiously as possible, subject to the Purchaser's assistance
and cooperation as reasonably required:
(a) (i) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus as may be
necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement
whenever the Purchaser of such Registrable Securities shall desire to sell
or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities from time to time in connection with a
registration statement pursuant to Rule 415 promulgated under the
Securities Act) and (ii) take all lawful action such that each of (A) the
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) the Prospectus, and any amendment
or supplement thereto, does not at any time during the Effectiveness Period
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, in light of the circumstances under which they were made, not
misleading;
(b) (i) prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or
delivery of the Prospectus (including any supplements thereto), provide
draft copies thereof to the Purchaser and reflect in such documents all
such comments as the Purchaser (and its counsel) reasonably may propose and
(ii) furnish to the Purchaser such numbers of copies of the Prospectus
including a preliminary prospectus or any amendment or supplement to the
Prospectus, as applicable, in conformity with the requirements of the
Securities Act, and such other documents, as the Purchaser may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities;
(c) comply with the New York blue sky laws with respect to the
Registrable Securities (subject to the limitations set forth in Section
3(g) above), and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Purchaser to consummate the
public sale or other disposition in such jurisdiction of the Registrable
Securities, except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein any general
consent to service of process;
(d) list such Registrable Securities on the Principal Market, and any
other exchange on which the Common Stock of the Company is then listed, if
the listing of such Registrable Securities is then permitted under the
rules of such exchange or the Principal Market;
(e) notify the Purchaser at any time when the Prospectus is required
to be delivered under the Securities Act, of the happening of any event of
which it has knowledge as a result of which the Prospectus, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and the Company shall prepare and file a curative amendment or
curative
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supplement under Section 5(a) as quickly as commercially possible and the
period beginning on the date of notice until the curative amendment is
effective or a curative supplement is filed shall be deemed a Suspension
Period and the Company shall compensate the Purchaser as set forth in
Section 3(j) herein;
(f) as promptly as practicable after becoming aware of such event,
notify the Purchaser (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the Commission or any state
authority of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful
action to effect the withdrawal, rescission or removal of such stop order
or other suspension;
(g) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Purchaser of its Registrable
Securities in accordance with the intended methods therefor provided in the
Prospectus which are customary for issuers to perform under the
circumstances;
(h) in the event of an underwritten offering, promptly include or
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information as the managing underwriters
reasonably agree should be included therein and to which the Company does
not reasonably object and make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after it is
notified of the matters to be included or incorporated in such prospectus
supplement or post-effective amendment; and
(i) maintain a transfer agent for its Common Stock.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Purchaser
and each person, if any, who controls the Purchaser within the meaning of
the Securities Act ("Distributing Purchaser") against any losses, claims,
damages or liabilities, joint or several (which shall, for all purposes of
this Agreement, include, but not be limited to, all reasonable costs of
defense and investigation and all reasonable attorneys' fees), to which the
Distributing Purchaser may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, or any related preliminary prospectus, the
Prospectus or amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
in light of the circumstances when made not misleading; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, preliminary prospectus, the
Prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by the
Distributing Purchaser specifically for use in the preparation thereof.
This Section 6(a) shall not inure to the benefit of any Distributing
Purchaser with respect to any person asserting such loss, claim, damage or
liability who
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purchased the Registrable Securities which are the subject thereof if the
Distributing Purchaser failed to send or give a copy of the Prospectus to
such person at or prior to the written confirmation to such person of the
sale of such Registrable Securities, where the Distributing Purchaser was
obligated to do so under the Securities Act or the rules and regulations
promulgated thereunder. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Distributing Purchaser agrees that it will indemnify and hold
harmless the Company, and each officer, director of the Company or person,
if any, who controls the Company within the meaning of the Securities Act,
against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees) to
which the Company or any such officer, director or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, or
any related preliminary prospectus, the Prospectus or amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in
each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, the Prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by such Distributing Purchaser
specifically for use in the preparation thereof. This indemnity agreement
will be in addition to any liability which the Distributing Purchaser may
otherwise have. Notwithstanding anything to the contrary herein, the
Distributing Purchaser shall not be liable under this Section 6(b) for any
amount in excess of the net proceeds to such Distributing Purchaser as a
result of the sale of Registrable Securities pursuant to the Registration
Statement.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may have to any
indemnified party except to the extent of actual prejudice demonstrated by
the indemnifying party. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, assume the defense thereof, subject
to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation, unless the indemnifying party
shall not pursue the action to its final conclusion. The indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the
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indemnifying party if the indemnifying party has assumed the defense of the
action with counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party is the Distributing Purchaser, the
fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the
named parties to any such action (including any impleaded parties) include
both the Distributing Purchaser and the indemnifying party and the
Distributing Purchaser shall have been advised by such counsel in writing
that there may be one or more legal defenses available to the indemnifying
party different from or in conflict with any legal defenses which may be
available to the Distributing Purchaser (in which case the indemnifying
party shall not have the right to assume the defense of such action on
behalf of the Distributing Purchaser, it being understood, however, that
the indemnifying party shall, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable only for the reasonable fees and expenses of one separate firm of
attorneys for the Distributing Purchaser, which firm shall be designated in
writing by the Distributing Purchaser and be approved by the indemnifying
party). No settlement of any action against an indemnified party shall be
made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.
All fees and expenses of the indemnified party (including reasonable costs
of defense and investigation in a manner not inconsistent with this Section and
all reasonable attorneys' fees and expenses) shall be promptly paid to the
indemnified party, as incurred; within ten (10) Trading Days of written notice
thereof to the indemnified party; provided, that the indemnifying party may
require such indemnified party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such indemnified
party is not entitled to indemnification hereunder.
Section 7. Contribution. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Purchaser shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees), in
either such case (after contribution from others) on the basis of relative fault
as well as any other relevant equitable considerations. The relative fault 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 the Company on the one hand
or the applicable Distributing Purchaser on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Distributing Purchaser
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
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referred to in this Section 7. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. 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.
Notwithstanding any other provision of this Section 7, in no event shall
any (i) Purchaser be required to undertake liability to any person under this
Section 7 for any amounts in excess of the dollar amount of the net proceeds to
be received by the Purchaser from the sale of the Purchaser's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are or were to be registered under the Securities Act and (ii)
underwriter be required to undertake liability to any person hereunder for any
amounts in excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable Securities
underwritten by it and distributed pursuant to the Registration Statement.
Section 8. Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be delivered as set forth in the
Purchase Agreement.
Section 9. Assignment. Neither this Agreement nor any rights of the
Purchaser or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, upon the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed in the case
of an assignment to an affiliate of the Purchaser, the Purchaser's interest in
this Agreement may be assigned at any time, in whole or in part, to any other
person or entity (including any affiliate of the Purchaser) who agrees to be
bound hereby.
Section 10. Counterparts/Facsimile. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when together shall constitute but one and the same instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party. In lieu of the original, a facsimile
transmission or copy of the original shall be as effective and enforceable as
the original.
Section 11. Remedies and Severability. The remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided by law. If
any term, provision, covenant or restriction of this Agreement is held by a
board of arbitration or a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of those
that may be hereafter declared invalid, illegal, void or unenforceable.
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Section 12. Conflicting Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the purchasers of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
Section 13. Headings. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any action may be brought as set
forth in the Purchase Agreement. The Company and the Purchaser agree to submit
themselves to the in personam jurisdiction of the state and federal courts
situated within the Southern District of the State of New York with regard to
any controversy arising out of or relating to this Agreement. Any party shall
have the right to seek injunctive relief from any court of competent
jurisdiction in any case where such relief is available. Any dispute under this
Agreement shall be submitted to arbitration under the American Arbitration
Association (the "AAA") in New York City, New York, and shall be finally and
conclusively determined by the decision of a board of arbitration consisting of
three (3) members (hereinafter referred to as the "Board of Arbitration")
selected as according to the rules governing the AAA. The Board of Arbitration
shall meet on consecutive business days in New York City, New York, and shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the losing party is required to pay to the other party in respect of a claim
filed. In connection with rendering its decisions, the Board of Arbitration
shall adopt and follow the laws of the State of New York. To the extent
practical, decisions of the Board of Arbitration shall be rendered no more than
thirty (30) calendar days following commencement of proceedings with respect
thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be authorized and is directed to enter a default judgment against any party
refusing to participate in the arbitration proceeding within thirty days of any
deadline for such participation. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and entered
in any court of competent jurisdiction. The prevailing party shall be awarded
its costs, including attorneys' fees, from the non-prevailing party as part of
the arbitration award. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party in such injunctive action shall be awarded its
costs, including attorney's fees, from the non-prevailing party.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO REGISTRATION RIGHTS REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed, on this 26th day of July, 2001
DATA RACE, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President & CFO
GRENVILLE FINANCE LTD.
By: /s/ Francois Morax
Francois Morax, Authorized Signatory
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