REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") dated as of
January 8, 1998, by and among StarBase Corporation, a Delaware corporation (the
"COMPANY"), and __________ (the "SUBSCRIBER").
W I T N E S S ET H:
WHEREAS, pursuant to The Unit Subscription Agreement (the "SUBSCRIPTION
AGREEMENT"), by and among the Company and Subscriber, the Company has agreed to
sell and the Subscriber has agreed to purchase an aggregate of 1,200,000 units
(the "UNITS") in two (2) tranches of 600,000 Units (each, a "TRANCHE"), each
Unit consisting of one share of the Company's Series D Preferred Stock, par
value $.01 per share (the "SERIES D PREFERRED STOCK"), with each share of the
Company's Series D Preferred Stock convertible into shares of the Company's
common stock, par value $.01 per share (the "SHARES") and one warrant to
purchase a 0.4166 share of Common Stock (each, a "WARRANT"); and
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Subscriber's entering into the Subscription Agreement, the Company has
agreed to provide the Subscriber with certain registration rights with respect
to the Shares;
NOW THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Subscription Agreement and this Registration Rights Agreement, the Company and
the Subscriber agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission
or any other Federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the Company's Common Stock, par value $.01 per
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share.
"REGISTRABLE SHARES" shall mean for each Tranche (i) the
Shares, (ii) any Common Stock of the Company issued or issuable in respect of
the Shares or upon any stock split, stock dividend, recapitalization or similar
event, or (iii) any Common Stock issued upon exercise of the
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Warrants; PROVIDED, HOWEVER, that shares of Common Stock or other securities
shall no longer be treated as Registrable Shares if (a) they have been sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, (b) they have been sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
so that all transfer restrictions and restrictive legends with respect thereto
are removed upon consummation of such sale, or (c) the Shares are available for
sale under the Securities Act (including Rule 144) in the opinion of counsel to
the Company, without compliance with the registration and prospectus delivery
requirements of the Securities Act so that no transfer restrictions or
restrictive legends will appear upon the Share certificates following the
consummation of such sale.
The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
"REGISTRATION EXPENSES" shall mean all expense incurred by the
Company in compliance with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, reasonable fees and
disbursements of one counsel for Subscriber, and the reasonable expenses of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar Federal Statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Shares.
2. REGISTRATION. The Common Stock issuable upon conversion of the
Series D Preferred Stock issued in both Tranches and upon exercise of the
Warrants issued in both Tranches will be registered for resale no later than 90
days from the issuance date of the Units pursuant to a registration statement on
Form S-3. The registration statement is to be filed within 30 days of the
issuance date of the Units for the first Tranche and shall be in a form
reasonably satisfactory to the Subscriber. If the registration statement is not
effective within 90 days of the issuance date for the first Tranche, the Company
will pay an amount equal to 2% of the purchase price of the Units for the first
Tranche on the 91st day and at the end of each 30-day period thereafter until
the registration statement has been declared effective.
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3. EXPENSES OF REGISTRATION. The Company shall bear all Registration
Expenses incurred in connection with any registration, qualification or
compliance of the Registrable Shares pursuant to this Agreement. All Selling
Expenses shall be born by the Subscriber.
4. REGISTRATION PROCEDURES. The Company shall advise the Subscriber of
the initiation of a registration under this Agreement and as to the completion
thereof. At its expense, the Company will:
(a) Use reasonable efforts to keep such registration effective
for a period of five (5) years or until the Subscriber has completed the
distribution described in the registration statement relating thereto, whichever
first occurs.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of securities
covered by such registration statement; and
(c) Furnish such number of prospectuses and other documents
incidental thereto, including any amendment of or supplement to the prospectus,
as the Subscriber from time to time may reasonably request.
5. INDEMNIFICATION.
(a) The Company will indemnify the Subscriber with respect to
which registration has been effected pursuant to this Agreement against all
claims, losses, damages and liabilities (or actions, proceedings or settlements
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus or other
document incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company, and will reimburse the Subscriber for any legal and any other expenses
as they are reasonably incurred in connection with the investigating defending
any such claim, loss, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity contained in this Section 5(a) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Company, and PROVIDED FURTHER
that the Company shall not be liable in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information unfurnished to the
Company by the Subscriber and stated to be specifically for use in the
registration statement filed pursuant to this Agreement. The foregoing indemnity
agreement is further subject to the condition that insofar as it relates to any
untrue prospectus, such indemnity agreement shall not inure to the benefit of
the foregoing unindemnified parties if copies of a final
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prospectus correcting the misstatement, or alleged misstatement, omission or
alleged omission upon which such loss, liability, claim or damage is based is
timely delivered to such indemnified party and a copy thereof was not furnished
to the person asserting the loss, liability, claim or damage.
(b) The Subscriber will indemnify the Company, each of its
directors and officers and each person who controls the Company within the
meaning of the Securities Act and the rules and regulations thereunder against
all claims, losses, damages and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus or
other document incident to any such registration or based upon any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or any violation of
the Securities Act or any rule or regulation thereunder applicable to the
Company and will reimburse the Company, and its directors, officers, partners,
persons, underwriters or control persons for any legal or any other expense
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, and only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) relating to such holder is made in such
registration statement, prospectus offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by the Subscriber and stated to be specifically for use therein;
PROVIDED, HOWEVEr, that the obligations of the Subscriber shall be limited to an
amount equal to the proceeds to the Subscriber of Registrable Shares sold under
such registration and provided further that such indemnification obligations
shall not apply if the Company modifies or changes or a material extent the
written information furnished by such Holder.
(c) Each party entitled to indemnification under this Section
5 (an "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
reasonably be withheld or delayed), and the Indemnified Party may participate in
such defense at such indemnified party's expense, and PROVIDED FURTHER that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement. No
Indemnifying Party, in the defense of any such claim or litigation, shall except
with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and shall
be reasonably required in connection with defense of such claim and litigation
resulting therefrom.
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6. INFORMATION BY HOLDER OF REGISTRABLE SHARES. The Subscriber shall
furnish to the Company such information regarding the Subscriber and the
distribution proposed by such holder of Registrable Shares as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration referred to in this Agreement.
7. MISCELLANEOUS.
7.1. GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to conflict of laws.
7.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
7.3. ENTIRE AGREEMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof.
7.4. NOTICES, ETC. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by
first-class mail, postage prepaid, or delivered by hand or by messenger or
courier delivery service, addressed (a) if to the Subscriber, at 0000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X0X0, Xxxxxx, or at such other address as
the Subscriber shall have furnished to the Company in writing, or (b) if to the
Company, at 00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
U.S.A., or at such other address as the Company shall have furnished to the
Subscriber in writing.
7.5. DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Registrable Shares, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power, or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereunder occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
7.6. COUNTERPARTS. This agreement may be executed in any
number of counterparts, each of which shall be enforceable against the parties
actually executing such
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counterparts, and all of which together shall constitute one instrument.
7.7. SEVERABILITY. In case any provision of this agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
7.8. AMENDMENTS. The provisions of this Agreement may be
amended at any time and from time to time, and particular provisions of this
Agreement may be waived, with and only with an agreement or consent in writing
signed by the Company and by the subscriber.
IN WITNESS WHEREOF, the undersigned executed the foregoing
Registration Rights Agreement as of the date first above written.
STARBASE CORPORATION
By:___________________________________
Name:
Title:
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Name:
Title:
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