EXHIBIT 10.34
BIGSTRING CORPORATION
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of May
19, 2006 by and among BIGSTRING CORPORATION, a Delaware corporation, (the
"Company"), and each investor listed on Schedule 1 hereto (each such investor,
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individually, an "Investor" and, collectively, the "Investors").
WHEREAS, the Company has agreed to issue and sell to the Investors, and
the Investors have agreed to purchase from the Company, an aggregate of 400,000
shares (the "Shares") of the Company's Series A Preferred Stock, par value
$0.0001 per share (the "Series A Preferred Stock"), and warrants (the
"Warrants") representing the right to purchase an aggregate of 1,000,000 shares
of Common Stock (as defined in Section 1 below), as adjusted pursuant to the
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terms of the Warrants (the "Warrant Shares");
WHEREAS, the Shares and the Warrants are being issued to the Investors
upon the terms and conditions set forth in the Securities Purchase Agreement,
dated as of the date hereof, between the Company and the Investors (the
"Securities Purchase Agreement"); and
WHEREAS, the terms of the Securities Purchase Agreement provide that it
shall be a condition precedent to the closing of the transactions thereunder,
for the Company and the Investors to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
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have the respective meanings set forth below or elsewhere in this Agreement as
described below:
"Affiliate" of any Person means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person, as such terms are used and construed
under Rule 144 (as defined below), and with respect to Tudor, in addition to the
foregoing, the term "Affiliate" shall also include the Related Entities.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except Saturday, Sunday and any day which
is a federal legal holiday or a day on which banking institutions in the State
of New York are authorized or required by law or other governmental action to
close.
"Certificate of Designations" means the Certificate of Designations of
the Series A Preferred Stock filed by the Company with the Secretary of State of
the State of Delaware establishing the rights, preferences and privileges of the
Series A Preferred Stock.
"Closing Date" has the meaning set forth in the Securities Purchase
Agreement.
"Common Stock" means the Company's common stock, par value $0.0001 per
share (including any securities into which or for which such shares may be
exchanged, or converted, pursuant to any stock dividend, stock split, stock
combination, recapitalization, reclassification, reorganization or other similar
event).
"Conversion Shares" means the shares of Common Stock issuable upon
conversion of the Series A Preferred Stock as set forth in the Certificate of
Designations.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.
"Mandatory Registration Statement" has the meaning set forth in Section
2(a).
"Person" (whether or not capitalized) means an individual, partnership,
limited liability company, corporation, association, trust, joint venture,
unincorporated organization, and any government, governmental department or
agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement (as defined below) (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 defined below)), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Shares (as defined below) covered by such Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference in such
Prospectus.
"Qualified Public Offering" means a bona fide public offering pursuant
to an effective registration statement under the Securities Act covering the
offer and sale of Common Stock for the account of the Company by a reputable
investment bank in which the gross cash proceeds to the Company (before
underwriting discounts, commissions and fees) are in excess of $30,000,000 and
following which offering the Common Stock is listed on a national securities
exchange or admitted to quotation on the NASDAQ National Market or Capital
Market.
"Registrable Shares" means, at the relevant time of reference thereto,
the Conversion Shares and the Warrant Shares (including any shares of capital
stock that may be issued in respect thereof pursuant to a stock split, stock
dividend, recombination, reclassification or the like); provided, however, that
the term "Registrable Shares" shall not include any of the Conversion Shares or
Warrant Shares that (a) are actually sold pursuant to a registration statement
that has been declared effective under the Securities Act by the SEC or (b) may
be sold at such time by the holder thereof pursuant to Rule 144(k) under the
Securities Act.
"Registration Statement" means the Mandatory Registration Statement,
and any additional registration statements contemplated by this Agreement,
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, pre- and post-effective amendments
thereto, all exhibits thereto, and all material incorporated by reference in
such registration statement or Prospectus.
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"Related Entities" includes, with respect to Tudor, any entities for
which any of the Tudor Entities or any of its Affiliates serve as general
partner and/or investment advisor or in a similar capacity, and all mutual funds
or other pooled investment vehicles or entities under the control or management
of any of the Tudor Entities or its Affiliates. For purposes of this Agreement
(a) "Tudor Entities" means each of the following: Tudor Investment Corporation,
Tudor Group Holdings, LLC, their respective Affiliates, and any Affiliate or
Affiliated Group of Tudor Investment Corporation and/or Tudor Group Holdings
LLC, and (b) with respect to the Tudor Entities, "Affiliated Group" has the
meaning given to it in Section 1504 of the Internal Revenue Code of 1986, as
amended, and in addition includes any analogous combined, consolidated or
unitary group, as defined under any applicable state, local or foreign income
tax law.
"Rule 144" means Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and all
of the rules and regulations promulgated thereunder.
"Tudor" means, collectively, Witches Rock Portfolio Ltd., The Tudor BVI
Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C.
2. Mandatory Shelf Registration.
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(a) As soon as practicable after the date hereof, and in any event
prior to the date that is sixty (60) days following the Closing Date (the
"Mandatory Filing Date"), the Company shall prepare and file with the SEC a
Registration Statement on such form under the Securities Act then available to
the Company for the purpose of registering under the Securities Act all of the
Registrable Shares for resale by, and for the account of, each Investor as an
initial selling stockholder thereunder (the "Mandatory Registration Statement").
The Mandatory Registration Statement shall permit the Investors to offer and
sell from time to time, on a delayed or continuous basis pursuant to Rule 415
under the Securities Act, any or all of the Registrable Shares. The Company
shall cause the Mandatory Registration Statement to be declared effective as
soon as practicable but in no event later than (x) the date that is ninety (90)
days following the Closing Date, in the event that the Registration Statement is
not reviewed by the SEC or (y) the date that is one hundred twenty (120) days
following the Closing Date in the event such review takes place (the "Mandatory
Effective Date") (including filing with the SEC, within three (3) Business Days
of the date that the Company is notified (orally or in writing, whichever is
earlier) by the SEC that the Mandatory Registration Statement will not be
reviewed or will not be subject to further review, a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
(an "Acceleration Request"), which request shall request an effective date that
is within three (3) Business Days of the date of such request). The Company
shall notify each Investor in writing promptly (and in any event within one (1)
Business Day) after the Company's submission of an Acceleration Request to the
SEC. The Company shall be required to keep the Mandatory Registration Statement
continuously effective (including through the filing of any required
post-effective amendments) until the earlier to occur of (i) five (5) years
after the date upon which a Qualified Public Offering is consummated and
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(ii) with respect to any Investor, during any period when all Registrable
Securities held by such Investor can be sold by such Investor in any 90-day
period within the volume limitations of Rule 144; provided, that in either case
such date shall be extended by the amount of time of any Suspension Period (as
defined below). Thereafter, the Company shall be entitled to withdraw the
Mandatory Registration Statement and, upon such withdrawal, the Investors shall
have no further right to offer or sell any of the Registrable Shares pursuant to
the Mandatory Registration Statement (or any prospectus relating thereto).
(b) Notwithstanding anything in this Section 2 to the contrary, if
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the Company shall furnish to the Investors a certificate signed by the
President, Chief Executive Officer or Chief Financial Officer of the Company
stating that the Board has made the good faith determination (i) that the
continued use by the Investors of the Mandatory Registration Statement for
purposes of effecting offers or sales of Registrable Shares pursuant thereto
would require, under the Securities Act, premature disclosure in the Mandatory
Registration Statement (or the Prospectus relating thereto) of material,
nonpublic information concerning the Company, its business or prospects or any
proposed material transaction involving the Company, (ii) that such premature
disclosure would be materially adverse to the Company, its business or prospects
or any such proposed material transaction or otherwise would not be in the best
interests of the Company and (iii) that it is therefore essential to suspend the
use by the Investors of the Mandatory Registration Statement (and the Prospectus
relating thereto), then the right of the Investors to use the Mandatory
Registration Statement (and the Prospectus relating thereto) for purposes of
effecting offers or sales of Registrable Shares pursuant thereto shall be
suspended for a period (the "Suspension Period") not greater than fifteen (15)
consecutive Business Days and with no more than two (2) such periods during any
consecutive twelve (12) month period. During the Suspension Period, the
Investors shall not offer or sell any Registrable Shares pursuant to or in
reliance upon the Mandatory Registration Statement (or the Prospectus relating
thereto). The Company agrees that, as promptly as possible, but in no event
later than one (1) Business Day, after the consummation, abandonment or public
disclosure of the circumstances that caused the Company to suspend the use of
the Mandatory Registration Statement (and the Prospectus relating thereto)
pursuant to this Section 2(b), the Company will as promptly as possible lift any
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suspension, provide the Investors with revised Prospectuses, if required, and
will notify the Investors of their ability to effect offers or sales of
Registrable Shares pursuant to or in reliance upon the Mandatory Registration
Statement.
(c) It shall be a condition precedent to the obligations of the
Company to register Registrable Shares for the account of an Investor pursuant
to this Section 2 that such Investor furnish to the Company such information
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regarding itself, the Registrable Securities held by it, and the method of
disposition of such securities as shall be required to effect the registration
of such Investor's Registrable Securities.
(d) In addition to (not in lieu of) any other rights or remedies the
Investors may have under this Agreement and applicable law, the parties hereto
agree that the Investors will suffer damages, and that it would not be feasible
to ascertain the extent of such damages with precision if, other than as
permitted hereunder: (i) any of the Registration Statements required by this
Agreement is not filed with the SEC on or prior to the date specified for such
filing in this Agreement; (ii) any of such Registration Statements has not been
declared effective by the SEC on or prior to the Mandatory Effective Date; or
(iii) any Registration Statement required by this Agreement is filed and
declared effective but thereafter ceases to be effective or
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fails to be usable for its intended purpose without cure in excess of the
Suspension Period (each such event described in clauses (i) through (iii), a
"Default Event"). The Company hereby agrees to pay to each Investor, for each
day of the period commencing on and including the date the Default Event first
occurs through and including the date such Default Event is cured, as liquidated
damages for such Default Event and not as a penalty the amount (described below
on a monthly basis) equal to the product of (x) one percent (1%) of $0.50,
multiplied by (y) the number of Registrable Shares held by such Investor as of
the date such Default Event first occurs (the "Liquidated Damages"). All accrued
Liquidated Damages shall be paid to Investors by the Company by wire transfer of
immediately available funds on the fifth (5th) day of each calendar month
immediately following the month in which a Default Event occurs or is
continuing; provided, however, that in no event will the amount of Liquidated
Damages for any calendar month exceed $25,000 (excluding interest on any late
payment of such Liquidated Damages). Any such payments shall apply on a pro rata
basis for any portion of a month in which a Default Event occurs and continues.
Any late payments of such Liquidated Damages shall bear interest at a rate of
one percent (1%) per month until paid in full. Following the cure of all Default
Events, the accrual of Liquidated Damages with respect to such occurrence will
cease.
3. "Piggyback" Registration.
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(a) If at any time the Company proposes to register any of its
Common Stock under the Securities Act for an underwritten offering, whether for
its own account or the account of others (but excluding any registrations to be
effected on Forms S-4 or S-8 or other applicable successor Forms), the Company
shall, each such time, give to the Investors twenty (20) days' prior written
notice of its intent to do so, and such notice shall describe the proposed
registration and shall offer such Investors the opportunity to include in such
registration such number of Registrable Shares as each such Investor may
request. Upon the written request of any Investor given to the Company within
fifteen (15) days after the receipt of any such notice by the Company, the
Company shall include in such Registration Statement the Registrable Shares of
such Investor requested to be registered, subject to cut-back as provided in
subsection (b) below.
(b) If the managing underwriter advises the Company in writing that,
in its opinion, the number of shares of Common Stock requested by the Investors
to be included in such registration is likely to affect materially and adversely
the success of the offering or the price that would be received for any shares
of Common Stock offered in such offering, then, notwithstanding anything in this
Section 3 to the contrary, the Company shall only be required to include in such
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registration, to the extent of the number of shares of Common Stock which the
Company is so advised can be sold in such offering without such effect, a number
of shares of Common Stock requested to be included in such registration for the
account of such Investors, pro rata with other stockholders and the Company on
the basis of the number of shares of Common Stock that each of them has
requested or proposed to be included in such registration.
(c) The Company shall not be required under this Section 3 or
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otherwise to include the Registrable Shares of any Investor in any such
registration unless such Investor accepts and agrees to the terms of the
underwriting, which shall be reasonable and customary, as agreed upon between
the Company and the underwriters selected by the Company.
(d) It shall be a condition precedent to the obligations of the
Company to register Registrable Shares for the account of an Investor pursuant
to this Section 3 that such
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Investor furnish to the Company such information regarding itself and the
Registrable Securities held by it as shall be required to effect such
registration of such Investor's Registrable Securities.
4. Obligations of the Company. In connection with the Company's
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registration obligations hereunder, the Company shall, as expeditiously as
practicable:
(a) Furnish to each Investor copies of all documents filed with the
SEC prior to their being filed with the SEC, (ii) use commercially reasonable
efforts to cause its officers and directors, counsel and certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of such Investor or its counsel, to conduct a reasonable
investigation within the meaning of the Securities Act, and (iii) notify the
Investors of any stop order issued or threatened by the SEC and use best efforts
to prevent the entry of such stop order or to remove it if entered.
(b) Prepare and file with the SEC such amendments and supplements,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to comply with the
Securities Act and to keep the Registration Statement continuously effective as
required herein, and prepare and file with the SEC such additional Registration
Statements as necessary to register for resale under the Securities Act all of
the Registrable Shares (including naming any permitted transferees of
Registrable Shares as selling stockholders in such Registration Statement); (ii)
cause any related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as possible to any comments received from
the SEC with respect to each Registration Statement or any amendment thereto and
as promptly as possible provide the Investors true and complete copies of all
correspondence from and to the SEC relating to the Registration Statement (other
than correspondence containing material nonpublic information); and (iv) comply
with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Shares covered by such Registration Statement
as so amended or in such Prospectus as so supplemented.
(c) Notify the Investors and their counsel as promptly as possible:
(i) when the SEC notifies the Company whether there will be a "review" of a
Registration Statement and whenever the SEC comments in writing on such
Registration Statement and (ii) when a Registration Statement, or any
post-effective amendment or supplement thereto, has become effective, and after
the effectiveness thereof: (A) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (B) of the issuance by
the SEC or any state securities commission of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Shares or the initiation of any proceedings for that purpose; and
(C) 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 Shares for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose. Without limitation of any
remedies to which the Investors may be entitled under this Agreement, if any of
the events described in Section 4(c)(ii)(A), 4(c)(ii)(B), and 4(c)(ii)(C)
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occurs, the Company shall use best efforts to respond to and correct the event.
(d) Notify the Investors and their counsel as promptly as possible
of the happening of any event as a result of which the Prospectus included in or
relating to a
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Registration Statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading; and,
thereafter, the Company will as promptly as possible prepare (and, when
completed, give notice to each Investor) a supplement or amendment to such
Prospectus so that, as thereafter delivered to the purchasers of such
Registrable Shares, such Prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements therein
not misleading; provided that upon such notification by the Company, the
Investors will not offer or sell Registrable Shares pursuant to such Prospectus
until the Company has notified the Investors that it has prepared a supplement
or amendment to such Prospectus and delivered copies of such supplement or
amendment to the Investors (it being understood and agreed by the Company that
the foregoing proviso shall in no way diminish or otherwise impair the Company's
obligation to as promptly as possible prepare a Prospectus amendment or
supplement as above provided in this Section 4(d) and deliver copies of same as
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above provided in Section 4(h) hereof), and it being further understood that, in
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the case of the Mandatory Registration Statement, any such period during which
the Investors are restricted from offering or selling Registrable Shares shall
constitute a Suspension Period.
(e) Upon the occurrence of any event described in Section 4(d)
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hereof, as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.
(f) Use best efforts to avoid the issuance of or, if issued, obtain
the withdrawal of, (i) any order suspending the effectiveness of any
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Shares for sale in any
jurisdiction, as promptly as possible (it being understood that, in the case of
the Mandatory Registration Statement, any period during which the effectiveness
of the Mandatory Registration Statement or the qualification of any Registrable
Shares is suspended shall constitute a Suspension Period).
(g) Furnish to the Investors and their counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, and all exhibits to the extent requested by such Investor or their
counsel (including those previously furnished or incorporated by reference) as
promptly as possible after the filing of such documents with the SEC.
(h) As promptly as possible furnish to each selling Investor,
without charge, such number of copies of a Prospectus, including a preliminary
Prospectus, in conformity with the requirements of the Securities Act, and such
other documents (including, without limitation, Prospectus amendments and
supplements) as each such selling Investor may reasonably request in order to
facilitate the disposition of the Registrable Shares covered by such Prospectus
and any amendment or supplement thereto. The Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Investors in connection with the offering and sale of the Registrable
Shares covered by such Prospectus and any amendment or supplement thereto to the
extent permitted by federal and state securities laws
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and regulations.
(i) Use best efforts to register and qualify (or obtain an exemption
from such registration and qualification) the Registrable Shares under such
other securities or blue sky laws of the states of residence of each Investor
and such other jurisdictions as each Investor shall reasonably request, to keep
such registration or qualification (or exemption therefrom) effective during the
periods each Registration Statement is effective, and do any and all other acts
or things which may be reasonably necessary or advisable to enable each Investor
to consummate the public sale or other disposition of Registrable Shares in such
jurisdiction, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions where
it is not then qualified or subject to process.
(j) Cooperate with the Investors to facilitate the timely
preparation and delivery of certificates representing the Registrable Shares to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Securities Purchase
Agreement and applicable law, of all restrictive legends, and to enable such
Registrable Shares to be in such denominations and registered in such names as
such Investors may request.
(k) Cooperate with any reasonable due diligence investigation
undertaken by the Investors, any managing underwriter participating in any
disposition pursuant to a Registration Statement, Investors' counsel and any
attorney, accountant or other agent retained by Investors or any managing
underwriter, in connection with the sale of the Registrable Shares, including,
without limitation, making available any documents and information; provided,
however, that the Company will not deliver or make available to any Investor
material, nonpublic information unless such Investor specifically requests and
consents in advance in writing to receive such material, nonpublic information
and, if requested by the Company, such Investor agrees in writing to treat such
information as confidential.
(l) At the request of an Affiliate, the Company shall amend any
Registration Statement to include such Affiliate as a selling stockholder in
such Registration Statement.
(m) Comply with all applicable rules and regulations of the SEC in
all material respects.
5. Expenses of Registration. The Company shall pay for all expenses
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(exclusive of underwriting discounts and commission, if any) incurred in
connection with a registration pursuant to this Agreement and compliance with
Section 4 of this Agreement, including, without limitation, (i) all
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registration, filing and qualification fees and expenses (including without
limitation those related to filings with the SEC, The NASDAQ National Market, or
any national securities exchange upon which the Company's securities are listed
and in connection with applicable state securities or blue sky laws), (ii) all
printing expenses, (iii) all messenger, telephone and delivery expenses incurred
by the Company, (iv) all fees and disbursements of counsel for the Company and
one counsel for the Investors, and (v) all fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement.
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6. Delay of Registration. Subject to Section 11(d) hereof, the
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Investors and the Company (other than with respect to Section 4(d) hereof) shall
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not take any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy which might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification. In the event that any Registrable Shares of the
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Investors are included in a Registration Statement pursuant to this Agreement:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Investor and each officer, director, fiduciary,
agent, investment advisor, employee, member (or other equity holder), general
partner and limited partner (and Affiliates thereof) of such Investor, each
broker, underwriter or other person acting on behalf of such Investor and each
person, if any, who controls such Investor within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, or administrative,
judicial, regulatory or civil proceedings, joint or several (the "Losses") to
which they may become subject under the Securities Act or otherwise, insofar as
such Losses (or actions in respect thereof) arise out of or relate to any untrue
or alleged untrue statement of any material fact contained in the Registration
Statement, or arise out of or relate to the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or any violation by the Company of
the Securities Act or state securities or blue sky laws applicable to the
Company or the relevant registration and leading to action or inaction required
of the Company in connection with such registration or qualification under such
Securities Act or state securities or blue sky laws; and, subject to the
provisions of Section 7(c) hereof, the Company will reimburse on demand such
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Investor, such broker or other person acting on behalf of such Investor or such
officer, director, fiduciary, employee, member (or other equity holder), general
partner, limited partner, affiliate or controlling person for any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability, or administrative, judicial,
regulatory or civil proceeding; provided, however, that the indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
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any such Losses if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, damage, liability, or
administrative, judicial, regulatory or civil proceeding to the extent that it
solely arises out of or is based upon an untrue statement of any material fact
contained in the Registration Statement or omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, in reliance upon and in conformity with written information furnished
by such Investor to the Company expressly for use in such Registration
Statement.
(b) To the fullest extent permitted by law, each Investor, severally
(as to itself) and not jointly, will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
the Securities Act, and all other Investors against any Losses to which the
Company or any such director, officer or controlling person or other Investor
may become subject to, under the Securities Act or otherwise, insofar as such
Losses (or actions in respect thereto) solely arise out of or are based upon any
untrue statement of any material fact contained in the Registration Statement,
or solely arise out of or relate to the omission to state
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therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement in reliance upon and in conformity with written
information furnished by such Investor to the Company expressly for use in such
Registration Statement; and, subject to the provisions of Section 7(d) hereof,
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such Investor will reimburse on demand any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person, or
other Investor in connection with investigating or defending any such Losses;
provided, however, that the maximum aggregate amount of liability of such
Investor under this Section 7 shall be limited to the proceeds (net of
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underwriting discounts and commissions, if any) actually received by such
Investor from the sale of Registrable Shares covered by such Registration
Statement; and provided, further, however, that the indemnity agreement
contained in this Section 7(b) or Section 7(e) shall not apply to amounts paid
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in settlement of any such Losses if such settlement is effected without the
consent of such Investor against which the request for indemnity is being made
(which consent shall not be unreasonably withheld).
(c) As promptly as possible after receipt by an indemnified party
under this Section 7 of notice of the threat, assertion or commencement of any
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action, such indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 7, notify the indemnifying
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party in writing of the commencement thereof and the indemnifying party shall
have the right to participate in and, to the extent the indemnifying party
desires, jointly with any other indemnifying party similarly noticed, to assume
at its expense the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that, the failure to notify an indemnifying party
promptly of the threat, assertion or commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 7 except (and only) to the extent that it shall be finally
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determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the indemnifying party.
(d) If any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which are different from or additional to those available to the indemnifying
party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section 7,
---------
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, and such indemnifying party shall
reimburse such indemnified party and any person controlling such indemnified
party for the fees and expenses of one counsel retained by the indemnified party
which are reasonably related to the matters covered by the indemnity agreement
provided in this Section 7. Subject to the foregoing, an 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 Company.
(e) If the indemnification provided for in this Section 7 from the
---------
indemnifying party is applicable by its terms but unavailable to an indemnified
party hereunder in respect of any Losses, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the maximum aggregate
liability of any Investor as set forth in Section 7(b), contribute to the amount
-----------
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of
10
the indemnifying party and indemnified party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative faults 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 to
state a material fact, has been 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. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Sections 7(a), 7(b), 7(c) and 7(d), any
------------- ---- ---- ---
legal or other fees, charges or expenses reasonably incurred by such party in
connection with any investigation or proceeding. 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. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section 7(e)
------------
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph.
(f) The indemnity and contribution agreements contained in this
Section are in addition to (not in lieu of) any liability that any indemnifying
party may have to any indemnified party.
8. Reports Under the Exchange Act. With a view to making available to
-------------------------------
the Investors the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit the Investors to sell the Registrable Shares to
the public without registration, the Company agrees to use best efforts to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144; (ii) file with the SEC in a timely manner all reports and
other documents required to be filed by an issuer of securities registered under
the Securities Act or the Exchange Act; (iii) as long as any Investor owns any
Shares, Conversion Shares or Warrant Shares, to furnish in writing upon such
Investor's request a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, and to furnish to such Investor a copy of the most recent annual
and quarterly reports of the Company, and such other reports and documents so
filed by the Company as may be reasonably requested in availing such Investor of
any rule or regulation of the SEC permitting the selling of any such Shares
without registration; and (iv) undertake any additional actions reasonably
necessary to maintain the availability of a Registration Statement, including
any successor or substitute forms, and the use of Rule 144.
9. Transfer of Registration Rights. Subject to the Securities Purchase
-------------------------------
Agreement, each Investor may assign or transfer any or all of its rights under
this Agreement to any Person, provided such assignee or transferee agrees in
writing to be bound by the provisions hereof that apply to such assigning or
transferring Investor. Upon any such, and each successive, assignment or
transfer to any permitted assignee or transferee in accordance with the terms of
this Section 9, such permitted assignee or transferee shall be deemed to be an
---------
"Investor" for all purposes of this Agreement.
11
10. Entire Agreement. This Agreement constitutes and contains the
-----------------
entire agreement and understanding of the parties with respect to the subject
matter hereof, and it also supersedes any and all prior negotiations,
correspondence, agreements or understandings with respect to the subject matter
hereof.
11. Miscellaneous.
-------------
(a) This Agreement, and any right, term or provision contained
herein, may not be amended, modified or terminated, and no right, term or
provision may be waived, except with the written consent of (i) the holders of a
majority of the then outstanding Registrable Shares and (ii) the Company;
provided that any amendment or modification that is materially and
disproportionately adverse to any particular Investor (as compared to all
Investors as a group) shall require the consent of such Investor.
(b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York. This Agreement shall be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns and transferees, provided that
the terms and conditions of Section 9 hereof are satisfied. Notwithstanding
---------
anything in this Agreement to the contrary, if at any time any Investor
(including any successors or assigned) shall cease to own any Registrable
Shares, all of such Investor's rights under this Agreement shall immediately
terminate.
(c) Any notices to be given pursuant to this Agreement shall be in
writing and shall be given by certified or registered mail, return receipt
request. Notices shall be deemed given when personally delivered or when mailed
to the addresses of the respective parties as set forth on Exhibit A or Schedule
--------- --------
1 hereto, as applicable, or to such changed address of which any party may
-
notify the others pursuant hereto, except that a notice of change of address
shall be deemed given when received. An electronic communication ("Electronic
Notice") shall be deemed written notice for purposes of this Section 11(c) if
------------
sent with return receipt requested to the electronic mail address specified by
the receiving party on Exhibit A or Schedule 1 hereto, as applicable. Electronic
--------- ----------
Notice shall be deemed received at the time the party sending Electronic Notice
receives verification of receipt by the receiving party.
(d) The parties acknowledge and agree that in the event of any
breach of this Agreement, remedies at law will be inadequate, and each of the
parties hereto shall be entitled to specific performance of the obligations of
the other parties hereto and to such appropriate injunctive relief as may be
granted by a court of competent jurisdiction. All remedies, either under this
Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
(e) This Agreement may be executed in a number of counterparts. All
such counterparts together shall constitute one Agreement, and shall be binding
on all the parties hereto notwithstanding that all such parties have not signed
the same counterpart. The parties hereto confirm that any facsimile copy of
another party's executed counterpart of this Agreement (or its signature page
thereof) will be deemed to be an executed original thereof.
12
(f) Except as contemplated in Sections 7 and 9 hereof, this
----------- -
Agreement is intended solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
Person (including, without limitation, any stockholder or debt holder of the
Company) other than the parties hereto.
(g) If any provision of this Agreement is invalid, illegal or
unenforceable, such provision shall be ineffective to the extent, but only to
the extent of, such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, unless such a construction would be unreasonable.
(h) This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their permitted successors and assigns.
[Signature Pages Follow]
13
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.
BIGSTRING CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
INVESTORS:
TUDOR INVESTMENT CORP., as investment adviser
to each Investor listed on Schedule 1 (other than Tudor
Proprietary Trading, L.L.C.)
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
TUDOR PROPRIETARY TRADING, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
Exhibit A
---------
All correspondence to the Company shall be addressed as follows:
BigString Corporation
0 Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Email Address: xxxxx@xxxxxxxxx.xxx
with copies (which shall not constitute Notice) to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
X.X. Xxx 00
Middletown, New Jersey 07748
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Email Address: xxxxxxxx@xxxxxx.xxx
All correspondence to the Investors shall be addressed as set forth in Schedule
1 hereto.
Schedule 1
----------
Schedule of Investors
Witches Rock Portfolio Ltd.
c/o Tudor Investment Corporation
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Tax ID.: 00-0000000
The Tudor BVI Global Portfolio Ltd.
c/o Tudor Investment Corporation
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Tax ID.: 00-0000000
Tudor Proprietary Trading, L.L.C.
c/o Tudor Investment Corporation
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Tax ID.: 00-0000000
