REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of May 25, 2007, among Celsia Technologies, Inc.,
a
Nevada corporation (the “Company”)
and
the several purchasers signatory hereto (each such purchaser, a “Purchaser”
and,
collectively, the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as
of the
date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1.
Definitions
Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement.
As used
in this Agreement, the following terms shall have the following
meanings:
“Advice”
shall
have the meaning set forth in Section 6(d).
“Effectiveness
Date”
means,
with respect to the initial Registration Statement required to be filed
hereunder, the 90th
calendar
day following the earlier of (i) the Filing Date of such Registration Statement
or (ii) the date such initial Registration Statement is actually filed with
the
Commission and with respect to any additional Registration Statements which
may
be required pursuant to Section 3(c), the 90th
calendar
day following the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement is required hereunder;
provided,
however,
that in
the event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth Trading Day following the date on which the Company is
so
notified if such date precedes the dates required above.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
“Event”
shall
have the meaning set forth in Section 2(b).
“Event
Date”
shall
have the meaning set forth in Section 2(b).
“Filing
Date”
means,
with respect to the initial Registration Statement required hereunder, the
earlier of (i) the 30th
calendar
day following the date the Company receives a written request from the Holders
of at least 70% in interest of the Registrable Securities then outstanding
to
file the initial Registration Statement hereunder and (ii) the 180th
calendar
day following the date hereof, and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the 30th
calendar
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day
following the date on which the Company first knows, or reasonably should
have
known, that such additional Registration Statement is required
hereunder.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Initial
Registration Statement”
means
the initial Registration Statement filed pursuant to this
Agreement.
“Initial
Shares”
means
a
number of Registrable Securities equal to one-third of the number of shares
of
Common Stock issued and outstanding and held by non-affiliates of the Company
immediately prior to the filing date of the Initial Registration
Statement.
“Losses”
shall
have the meaning set forth in Section 5(a).
“Plan
of Distribution”
shall
have the meaning set forth in Section 2(a).
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted
from a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
(i) all of the shares of Common Stock issuable upon conversion in full of
the
Debentures, (ii) all shares of Common Stock issuable as interest or principal
on
the Debentures assuming all permissible interest and principal payments are
made
in shares of Common Stock and the Debentures are held until maturity, (iii)
all
Warrant Shares, (iv) any additional shares of Common Stock issuable in
connection with any anti-dilution provisions in the Debentures or the Warrants
(in each case, without giving effect to any limitations on conversion set
forth
in the Debenture or limitations on exercise set forth in the Warrant) and
(v)
any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing.
“Registration
Statement”
means
the registration statement required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), including (in each
case)
the Prospectus, amendments and supplements to such registration statement
or
Prospectus, including pre- and post-effective amendments, all
exhibits
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thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such
Rule may be amended or interpreted from time to time, or any similar rule
or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such
Rule may be amended or interpreted from time to time, or any similar rule
or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Selling
Shareholder Questionnaire”
shall
have the meaning set forth in Section 3(a).
“SEC
Guidance”
means
(i) any publicly-available written or oral guidance, comments, requirements
or
requests of the Commission staff and (ii) the Securities Act.
2.
Shelf
Registration
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all or such portion
of the Registrable Securities as permitted by SEC Guidance (provided that
the
Company shall use diligent efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the
SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29) that are not then registered on an effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith) and shall contain (unless otherwise directed
by at
least an 85% majority in interest of the Holders) substantially the
“Plan
of Distribution”
attached hereto as Annex
A.
Subject
to the terms of this Agreement, the Company shall use its best efforts to
cause
a Registration Statement to be declared effective under the Securities Act
as
promptly as possible after the filing thereof, but in any event prior to
the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until
all
Registrable Securities covered by such Registration Statement have been sold,
or
may be sold without volume restrictions pursuant to Rule 144(k) (the
“Effectiveness
Period”)
as
determined by the counsel to the Company pursuant to a written opinion letter
to
such effect, addressed and acceptable to the Company’s transfer agent and the
affected Holders; provided, however, that each Holder shall provide the Company
with such information as may reasonably be requested in order to determine
whether such Registrable Securities may be sold pursuant to Rule 144(k).
The Company shall telephonically request effectiveness of a
Registration
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Statement
as of 5:00 p.m. New York City time on a Trading Day. The Company shall
immediately notify the Holders via facsimile or by e-mail delivery of a “.pdf”
format data file of the effectiveness of a Registration Statement on the
same
Trading Day that the Company telephonically confirms effectiveness with the
Commission, which shall be the date requested for effectiveness of a
Registration Statement. The Company shall, by 9:30 a.m. New York City time
on
the Trading Day after the Effective Date, file a final Prospectus with the
Commission as required by Rule 424. Failure to so notify the Holder within
1
Trading Day of such notification of effectiveness or failure to file a final
Prospectus as foresaid shall be deemed an Event under Section 2(b). Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated
damages in Section 2(b), if any SEC Guidance sets forth a limitation of the
number of Registrable Securities permitted to be registered on a particular
Registration Statement (and notwithstanding that the Company used diligent
efforts to advocate with the Commission for the registration of all or a
greater
number of Registrable Securities), unless otherwise directed in writing by
a
Holder as to its Registrable Securities, the number of Registrable Securities
to
be registered on such Registration Statement will first be reduced by
Registrable Securities represented by Warrant Shares (applied, in the case
that
some Warrant Shares may be registered, to the Holders on a pro rata basis
based
on the total number of unregistered Warrant Shares held by such Holders),
and
second by Registrable Securities represented by Conversion Shares (applied,
in
the case that some Conversion Shares may be registered, to the Holders on
a pro
rata basis based on the total number of unregistered Conversion Shares held
by
such Holders).
(b) If:
(i)
the Initial Registration Statement is not filed on or prior to its Filing
Date
(if the Company files the Initial Registration Statement without affording
the
Holders the opportunity to review and comment on the same as required by
Section
3(a) herein, the Company shall be deemed to have not satisfied this clause
(i)),
or (ii) the Company fails to file with the Commission a request for acceleration
of a Registration Statement in accordance with Rule 461 promulgated under
the
Securities Act, within five Trading Days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that
such Registration Statement will not be “reviewed” or not be subject to further
review, or (iii) prior to the Effectiveness Date of a Registration Statement,
the Company fails to file a pre-effective amendment and otherwise respond
in
writing to comments made by the Commission in respect of such Registration
Statement within 20 Trading Days after the receipt of comments by or notice
from
the Commission that such amendment is required in order for such Registration
Statement to be declared effective, or (iv) as to, in the aggregate among
all
Holders on a pro-rata basis based on their purchase of the Securities pursuant
to the Purchase Agreement, a Registration Statement registering for resale
all
of the Initial Shares is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) all of the
Registrable Securities are not registered for resale pursuant to one or more
effective Registration Statements on or before May 25, 2009, or (vi) after
the
Effectiveness Date of a Registration Statement, such Registration Statement
ceases for any reason to remain continuously effective as to all Registrable
Securities included in such Registration Statement, or the Holders are otherwise
not permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than 20 consecutive Trading Days or more
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than
an
aggregate of 30 Trading Days during any 12-month period (which need not be
consecutive calendar days) (any such failure or breach being referred to
as an
“Event”,
and
for purposes of clause (i), (iv) or (v) the date on which such Event occurs,
or
for purposes of clause (ii) the date on which such five Trading Day period
is
exceeded, or for purposes of clause (iii) the date which such 20 Trading
Day
period is exceeded, or for purposes of clause (vi) the date on which such
20 or
30 Trading Day period, as applicable, is exceeded being referred to as
“Event
Date”),
then,
in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of
each
such Event Date (if the applicable Event shall not have been cured by such
date)
until the applicable Event is cured, the Company shall pay to each Holder
an
amount in cash, as partial liquidated damages and not as a penalty, equal
to
1.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any unregistered Registrable Securities then held
by such
Holder. The parties agree that (1) the Company shall not be liable for
liquidated damages under this Agreement with respect to any Warrants or Warrant
Shares, (2) in no event will the Company be liable for liquidated damages
under
this Agreement in excess of 1.0% of the aggregate Subscription Amount of
the
Holders in any 30-day period and (3) the maximum aggregate liquidated damages
payable to a Holder under this Agreement shall be 24% of the aggregate
Subscription Amount paid by such Holder pursuant to the Purchase Agreement.
If
the Company fails to pay any partial liquidated damages pursuant to this
Section
in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from
the
date such partial liquidated damages are due until such amounts, plus all
such
interest thereon, are paid in full. The partial liquidated damages pursuant
to
the terms hereof shall apply on a daily pro rata basis for any portion of
a
month prior to the cure of an Event.
3.
Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Not
less
than five Trading Days prior to the filing of each Registration Statement
and
not less than one Trading Day prior to the filing of any related Prospectus
or
any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall (i) furnish to each Holder copies of all such documents proposed to
be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders
and
(ii) cause its officers and directors, counsel and independent certified
public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall
not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that the Company
is
notified of such objection in writing
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no
later
than 5 Trading Days after the Holders have been so furnished copies of a
Registration Statement or 2 Trading Days after the Holders have been so
furnished copies of any related Prospectus or amendments or supplements thereto.
Each Holder agrees to furnish to the Company a completed questionnaire in
the
form attached to this Agreement as Annex
B
(a
“Selling
Shareholder Questionnaire”)
not
less than two Trading Days prior to the Filing Date or by the end of the
fourth
Trading Day following the date on which such Holder receives draft materials
in
accordance with this Section.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms
of this
Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
424; (iii) respond as promptly as reasonably possible to any comments received
from the Commission with respect to a Registration Statement or any amendment
thereto and provide as promptly as reasonably possible to the Holders true
and
complete copies of all correspondence from and to the Commission relating
to a
Registration Statement (provided that the Company may excise any information
contained therein which would constitute material non-public information
as to
any Holder which has not executed a confidentiality agreement with the Company);
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period
in
accordance (subject to the terms of this Agreement) with the intended methods
of
disposition by the Holders thereof set forth in such Registration Statement
as
so amended or in such Prospectus as so supplemented.
(c) If
during
the Effectiveness Period and after the initial Registration Statement required
to be filed hereunder has been declared effective by the Commission, the
number
of Registrable Securities at any time exceeds 100% of the number of shares
of
Common Stock then registered in a Registration Statement, then the Company
shall
file as soon as reasonably practicable, but in any case prior to the applicable
Filing Date, an additional Registration Statement covering the resale by
the
Holders of not less than the number of such Registrable Securities.
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made)
as
promptly as reasonably possible (and, in the case of (i)(A) below, not less
than
2 Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than 2 Trading Days following the
day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing
on
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such
Registration Statement; and (C) with respect to a Registration Statement
or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or
for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of
the
receipt by the Company of any notification with respect to the suspension
of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any
Proceeding for such purpose; (v) of the occurrence of any event or passage
of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus,
as
the case may be, it will not contain any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes
may
be material and that, in the determination of the Company, makes it not in
the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided,
further,
that
notwithstanding each Holder’s agreement to keep such information confidential,
the Holders make no acknowledgement that any such information is material,
non-public information.
(e) Use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of
(i) any order suspending the effectiveness of a Registration Statement, or
(ii)
any suspension of the qualification (or exemption from qualification) of
any of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(f) Furnish
to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person,
and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of
such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except
after
the giving of any notice pursuant to Section 3(d).
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(h)
The
Company shall effect a filing with respect to the public offering contemplated
by the Registration Statement (an “Issuer
Filing”)
with
the National Association of Securities Dealers, Inc. (“NASD”)
Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within
one Trading Day of the date that the Registration Statement is first filed
with
the Commission and pay the filing fee required by such Issuer Filing. The
Company shall use commercially reasonable efforts to pursue the Issuer Filing
until the NASD issues a letter confirming that it does not object to the
terms
of the offering contemplated by the Registration Statement. A copy of the
Issuer
Filing and all related correspondence with respect thereto shall be provided
to
FWS.
(i) Prior
to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale
by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax
in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.
(j) If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to
be in
such denominations and registered in such names as any such Holders may
request.
(k) Upon
the
occurrence of any event contemplated by Section 3(d), as promptly as reasonably
possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders
of
the premature disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to
state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If
the
Company notifies the Holders in accordance with clauses (iii) through (vi)
of
Section 3(d) above to suspend the use of any Prospectus until the requisite
changes to such Prospectus have been made, then the Holders shall suspend
use of
such Prospectus. The Company will use its best efforts to
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ensure
that the use of the Prospectus may be resumed as promptly as is practicable.
The
Company shall be entitled to exercise its right under this Section 3(k) to
suspend the availability of a Registration Statement and Prospectus, subject
to
the payment of partial liquidated damages pursuant to Section 2(b), for a
period
not to exceed 60 calendar days (which need not be consecutive days) in any
12
month period.
(l) Comply
with all applicable rules and regulations of the Commission.
(m) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by
such
Holder and, if required by the Commission, the natural persons thereof that
have
voting and dispositive control over the Common Stock. During any periods
that
the Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails
to
furnish such information within three Trading Days of the Company’s request or a
completed Selling Shareholder Questionnaire as described in Section 3(a)
above,
any liquidated damages that are accruing at such time as to such Holder only
shall be tolled and any Event that may otherwise occur solely because of
such
delay shall be suspended as to such Holder only, until such information is
delivered to the Company, and the Company shall be permitted to exclude such
Holder from such Registration Statement, provided that as soon as such
information and/or questionnaire is furnished, the Company shall use its
best
efforts to include such Holder on the Registration Statement after
filing.
4.
Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The
fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses) (A) with respect to filings required to be made with any
Trading Market on which the Common Stock is then listed for trading, (B)
in
compliance with applicable state securities or Blue Sky laws reasonably agreed
to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with
respect
to any filing that may be required to be made by any broker through which
a
Holder intends to make sales of Registrable Securities with NASD Regulation,
Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no
more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries
and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on
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any
securities exchange as required hereunder. In no event shall the Company
be
responsible for any broker or similar commissions of any Holder or, except
to
the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders.
5.
Indemnification.
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin
call
of Common Stock), investment advisors and employees (and any other Persons
with
a functionally equivalent role of a Person holding such titles, notwithstanding
a lack of such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act) and the officers, directors, members,
shareholders, partners, agents and employees (and any other Persons with
a
functionally equivalent role of a Person holding such titles, notwithstanding
a
lack of such title or any other title) of each such controlling Person, to
the
fullest extent permitted by applicable law, from and against any and all
losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of
the
Securities Act, the Exchange Act or any state securities law, or any rule
or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that
(i)
such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly
for use
therein, or to the extent that such information relates to such Holder or
such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in a
Registration Statement, such Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto
for
this purpose) or (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated
or
defective Prospectus after the Company has notified such Holder in writing
that
the Prospectus is outdated or defective and prior to the receipt by such
Holder
of the Advice contemplated in Section 6(d). The Company shall notify the
Holders
promptly of the institution, threat or assertion of any Proceeding arising
from
or in connection with the transactions contemplated by this Agreement of
which
the Company is aware.
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees,
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each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the extent
arising out of or based solely upon: (x) such Holder’s failure to comply with
the prospectus delivery requirements of the Securities Act or (y) any untrue
or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or in any amendment or supplement thereto or in
any
preliminary prospectus, or arising out of or relating to any omission or
alleged
omission of a material fact required to be stated therein or necessary to
make
the statements therein not misleading (i) to the extent, but only to the
extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion
in
such Registration Statement or such Prospectus or (ii) to the extent that
such
information relates to such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing
by
such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus
or in any amendment or supplement thereto or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior
to
the receipt by such Holder of the Advice contemplated in Section 6(d). In
no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the
sale
of the Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is
sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only)
to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any
such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees
and
expenses; (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory
to such
Indemnified Party in any such Proceeding; or (3) the named parties to any
such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is
likely
-11-
to
exist
if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at
the
expense of the Indemnifying Party, the Indemnifying Party shall not have
the
right to assume the defense thereof and the reasonable fees and expenses
of no
more than one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of
any
such Proceeding effected without its written consent, which consent shall
not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the
prior
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in
a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to
the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined to be not entitled to indemnification hereunder.
(d) Contribution.
If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses,
then
each Indemnifying Party shall contribute to the amount paid or payable by
such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with
the
actions, statements or omissions that resulted in such Losses as well as
any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result
of any Losses shall be deemed to include, subject to the limitations set
forth
in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
by such party in connection with any Proceeding to the extent such party
would
have been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in
-12-
excess
of
the amount by which the net proceeds actually received by such Holder from
the
sale of the Registrable Securities subject to the Proceeding exceeds the
amount
of any damages that such Holder has otherwise been required to pay by reason
of
such untrue or alleged untrue statement or omission or alleged
omission.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6.
Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case
may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The Company and
each
Holder agree that monetary damages would not provide adequate compensation
for
any losses incurred by reason of a breach by it of any of the provisions
of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.
(b) No
Piggyback on Registrations.
Except
as set forth on Schedule
6(b),
neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in the
Registration Statements other than the Registrable Securities. The Company
shall
not file any other registration statements until all Registrable Securities
are
registered pursuant to a Registration Statement that is declared effective
by
the Commission, provided that this Section 6(b) shall not prohibit the Company
from filing amendments to registration statements filed prior to the date
of
this Agreement.
(c) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with
sales
of Registrable Securities pursuant to a Registration Statement.
(d) Discontinued
Disposition.
By its
acquisition of Registrable Securities, each Holder agrees that, upon receipt
of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement
until
it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as it
practicable. The Company agrees and acknowledges that any periods during
which
the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section
2(b).
-13-
(e) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or
Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination
and, if
within fifteen days after the date of such notice, any such Holder shall
so
request in writing, the Company shall include in such registration statement
all
or any part of such Registrable Securities such Holder requests to be
registered; provided,
however,
that
the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a
then
effective Registration Statement.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence,
may not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of 70% or more of the then outstanding
Registrable Securities (including, for this purpose, any Registrable Securities
issuable upon conversion or exercise of any Security). If a Registration
Statement does not register all of the Registrable Securities pursuant to
a
waiver or amendment done in compliance with the previous sentence, then the
number of Registrable Securities to be registered for each Holder shall be
reduced pro rata among all Holders and each Holder shall have the right to
designate which of its Registrable Securities shall be omitted from such
Registration Statement. Notwithstanding the foregoing, a waiver or consent
to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
(g) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be delivered as set forth in the Purchase Agreement.
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the
then-outstanding Registrable Securities. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.
(i) No
Inconsistent Agreements.
Neither
the Company nor any of its Subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its Subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that
would
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts
-14-
with
the
provisions hereof. Except as set forth on the Disclosure Schedules to the
Purchase Agreement, neither the Company nor any of its subsidiaries has
previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been satisfied
in
full.
(j) Execution
and Counterparts.
This
Agreement may be executed in two or more counterparts, all of which when
taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered
to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on
whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(k) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined in accordance with the provisions of
the
Purchase Agreement.
(l) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any other remedies
provided by law.
(m) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by 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 commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that
may be
hereafter declared invalid, illegal, void or unenforceable.
(n) Headings.
The
headings in this Agreement are for convenience only, do not constitute a
part of
the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
(o) Independent
Nature of Holders’ Obligations and Rights.
The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered
at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall
be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled
to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder
to be
joined as an additional party in any proceeding for such purpose.
********************
-15-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
By:
/s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Chief Financial Officer
|
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
-16-
[SIGNATURE
PAGE OF HOLDERS TO CSAT RRA]
Name
of
Holder: __________________________
Signature
of Authorized Signatory of Holder:
__________________________*
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]
*
Executed by each Holder
-17-
