EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of _____________, 2000 (the
"Agreement"), by and among Com21, Inc., a Delaware corporation
("Purchaser"), and the shareholders of GADline, Ltd., a company
organized under the laws of Israel (the "Company") named on
Exhibit A hereto (the "Sellers").
RECITALS
A. Purchaser, the Company, each of the Sellers, and Xxxx Xxxxx,
as Sellers' Representative, have entered into a Share Purchase
Agreement, dated as of April 18, 2000 (the "Purchase Agreement"),
which provides for the purchase (the "Share Purchase") by
Purchaser of all of the issued and outstanding Ordinary Shares,
NIS 0.5 nominal value per share (the "Ordinary Shares"), of the
Company held by the Sellers from the Sellers.
B. The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase
Agreement.
C. The Sellers and Purchaser desire that the transactions
contemplated by the Purchase Agreement be consummated.
D. As of the date of this Agreement, the Sellers own Ordinary
Shares, which as of the closing of the Share Purchase (the
"Closing"), will be purchased in exchange for an aggregate of up
to 2,450,000 shares (the "Initial Closing Shares") of the common
stock of Purchaser, par value $0.001 per share (the "Purchaser
Common Stock"). The Purchase Agreement also provides for the
issuance of up to an aggregate of up to 210,000 additional shares
of Purchaser Common Stock on or prior to September 30, 2000 upon
the occurrence of a certain milestone (the "First Milestone
Shares"), and for the issuance of up to an aggregate of up to
140,000 additional shares of Purchaser Common Stock on or prior
to February 28, 2001 upon the occurrence of a certain milestone
(the "Second Milestone Shares").
E. The Board of Directors of Purchaser has determined that it
is in the best interests of Purchaser and its stockholders to
enter into this Agreement.
F. The Sellers have determined that it is in their best
interest to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Certain Definitions. Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them
in the Purchase Agreement. For purposes of this Agreement, the
following terms shall have the following respective meanings:
(a) "Commission" shall mean the United States Securities and
Exchange Commission, or any other federal agency at the time
administering the Exchange Act or the Securities Act, whichever
is the relevant statute for the particular purpose.
(b) "Effective Time" shall mean the date on which the Commission
declares the Registration Statement effective or on which the
Registration Statement otherwise becomes effective.
(c) "Exchange Act" shall mean the Securities Exchange Act of
1934, or any successor thereto, as the same shall be amended from
time to time.
(d) "Purchaser Common Stock" shall have the meaning set forth in
the recitals to this Agreement.
(e) "Person" means, where applicable, an individual, a
partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
(f) "Prospectus" means the prospectus included in the
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement
in reliance upon Rule 430A under the Securities Act), as amended
or supplemented by any prospectus supplement.
(g) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration
statement by the Commission.
(h) "Registrable Securities" means (i) the Initial Closing
Shares, the First Milestone Shares and the Second Milestone
Shares (including, in each case, the Escrow Shares constituting a
part of such shares) held by the Sellers and issued to the
Sellers pursuant to the Purchase Agreement (collectively, the
"Share Purchase Shares") and (ii) any other securities issuable
in respect of such Share Purchase Shares held by the Sellers
(including, without limitation, by reason of a stock split, stock
dividend, recapitalization, merger, consolidation or similar
event), which are eligible for registration by Purchaser pursuant
to Section 6.11 of the Purchase Agreement. Notwithstanding the
foregoing, shares of Purchaser Common Stock and such other
securities shall only be treated as Registrable Securities if and
so long as they have not been sold to or through a broker or
dealer or underwriter in a public distribution or a sale pursuant
to Rule 144 or Rule 145.
(i) "Registration Expenses" shall mean all expenses, except
Selling Expenses and as otherwise stated below, incurred by
Purchaser in complying with Sections 2 and 3 hereof, including,
without limitation, the registration, qualification and filing
fees, printing expenses, escrow fees, fees and disbursements of
counsel and accountants for Purchaser, blue sky fees and expenses
and all internal expenses of Purchaser (including, without
limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties).
(j) "Registration Statement" shall mean a registration statement
of Purchaser which covers the Registrable Securities filed with
the Commission on Form S-3 under the Securities Act or any
registration form under the Securities Act subsequently adopted
by the Commission which similarly permits inclusion or
incorporation of substantial information by reference to other
documents filed by Purchaser with the Commission.
(k) "Securities Act" shall mean the Securities Act of 1933, or
any successor thereto, as the same shall be amended from time to
time.
(l) "Sellers' Requisite Information" shall have the meaning set
forth in Section 3(g) hereof.
(m) "Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the
Registrable Securities.
(n) "Underwriter" means any underwriter of Registrable
Securities in connection with an offering thereof.
2. Registration Statement.
(a) Initial Registration. Subject to certain limitations set
forth elsewhere in this Agreement, (i) Purchaser shall, at
Purchaser's own expense, file, as soon as practicable, but in no
event (except as provided below) later than ten (10) days, after
the later to occur of the date of the Closing Date or the date
upon which Purchaser's Quarterly Report on Form 10-Q for the most
recent quarter ending prior to the Closing Date is required to be
filed, a Registration Statement (the "Initial Registration
Statement") to provide for the resale by the Sellers of the
Registrable Securities then outstanding, and shall use its
commercially reasonable efforts to cause such Registration
Statement on Form S-3 to become effective as promptly as
reasonably practicable thereafter, and (ii) within thirty (30)
days after the issuance of any additional Registrable Securities,
Purchaser shall, at Purchaser's own expense, either amend the
Initial Registration Statement or file an additional Registration
Statement (such amendment or additional Registration Statement
being referred to herein as an "Additional Registration
Statement") to provide for the resale by the Sellers of such
additional Registrable Securities, and shall use its commercially
reasonable efforts to cause such Additional Registration
Statement to become effective as promptly as reasonably
practicable thereafter. The offering made pursuant to any such
Registration Statement shall not be underwritten.
Notwithstanding anything herein or in the Purchase Agreement, in
the event that all of the Registrable Securities held by a Seller
can be sold by such Seller in a single three-month period in
accordance with Rule 144 under the Securities Act, Purchaser
shall have no obligation to cause the shares of Purchaser Common
Stock held by such Seller to continue to be registered.
(b) Delayed Filing. In the event that any Seller shall have
failed to furnish to Purchaser such Sellers' Requisite
Information on or prior to the Closing Date (in the case of the
Initial Registration Statement) or the date of issuance of any
additional Registrable Securities issued after the Closing Date
(in the case of any Additional Registration Statement) (provided,
that Purchaser shall have requested such Sellers' Requisite
Information from such Seller not later than fourteen (14) days
prior to the Closing Date or such other issuance date, as
applicable), Purchaser shall be entitled, in its reasonable
discretion, to (i) file the Initial Registration Statement or
Additional Registration Statement, as applicable, as set forth
above without including any of the Registrable Securities held by
such Seller, or (ii) defer the filing of the Initial Registration
Statement or Additional Registration Statement, as applicable,
until the earlier to occur of the tenth day after such Seller
shall have furnished such information or the thirtieth day after
such Registration Statement is otherwise required to be filed
pursuant to paragraph (a) above.
(c) Suspension. If Purchaser shall determine pursuant to the
reasonable and good faith judgment of its President and its Chief
Executive Officer, or alternatively, the Board of Directors of
Purchaser, that it would be significantly harmful to Purchaser
and its stockholders for resales of Registrable Securities to be
made pursuant to the Registration Statement, due to (i) the
existence of a material development or potential material
development with respect to or involving Purchaser which
Purchaser would be obligated to disclose in the Prospectus
contained in the Registration Statement, which disclosure would
in the good faith judgment of the President and Chief Executive
Officer or the Board of Directors of Purchaser be premature or
otherwise inadvisable at such time and would not be in the best
interests of Purchaser and its stockholders, or (ii) the
occurrence of any event that makes any statement made in such
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of
any changes in the Registration Statement or Prospectus so that
it will not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, then Purchaser shall deliver a certificate
in writing to the Sellers to the effect of the foregoing and,
upon receipt of such certificate, the use of the Registration
Statement and Prospectus will be deferred or suspended and will
not recommence until (1) such Seller's receipt from Purchaser of
copies of the supplemented or amended Prospectus, or (2) such
Sellers are advised in writing by Purchaser that the Prospectus
may be used. Purchaser will use its reasonable best efforts to
ensure that the use of the Registration Statement and Prospectus
may be resumed, as soon as practicable and, in the case of a
pending development or event referred to in (i) above, as soon,
in the judgment of Purchaser, as disclosure of the material
information relating to such pending development would not have a
material adverse effect on Purchaser's ability to consummate the
transaction, if any, to which such development relates.
Notwithstanding anything to the contrary in this Agreement,
Purchaser's ability to defer or suspend the use of the
Registration Statement and Prospectus shall not be available to
Purchaser for more than ninety (90) days in any 12 month period.
3. Registration Procedures. In connection with the
Registration Statement, the following provisions shall apply:
(a) Purchaser shall, if necessary and subject to Section 2(c)
above, as expeditiously as practicable supplement or make
amendments to the Registration Statement and file such supplement
and amendments with the Commission, if required by the rules,
regulations or instructions applicable to the registration form
used by Purchaser for the Registration Statement or by the
Securities Act or the rules or regulations thereunder.
(b) Purchaser shall take such action as may be necessary so that
(i) the Registration Statement, and any amendment thereto, and
any Prospectus forming a part thereof, and any amendment or
supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all
material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) the
Registration Statement, and any amendment thereto, does not, when
it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading
and (iii) any Prospectus forming part of the Registration
Statement, and any amendment or supplement to such Prospectus,
does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they
were made, not misleading.
(c) Purchaser shall advise the Sellers and, if requested by the
Sellers, confirm such advice in writing:
(i) when the Registration Statement, and any amendment thereto,
has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; and
(iv) of the receipt by Purchaser of any notification with respect
to the suspension of the qualification of the securities included
in the Registration Statement therein for sale in any
jurisdiction or the initiation of any proceeding for such
purpose.
(d) Purchaser shall use its reasonable best efforts to maintain
the effectiveness of the Registration Statement until the earlier
to occur of (A) the sale of all of the Registrable Securities so
registered and (B) the first anniversary of the Effective Time,
provided, however, that the time period specified in this clause
(B) shall be extended by the number of days Purchaser defers or
suspends the use of the Registration Statement and Prospectus
pursuant to Section 2(c).
(e) Purchaser shall, as expeditiously as practicable, furnish to
each of the Sellers at least one copy of the Registration
Statement and any post-effective amendments thereto, including
financial statements and schedules contained therein.
(f) Purchaser shall, as expeditiously as practicable, register
or qualify or cooperate with the Sellers in connection with the
registration or qualification of the Registrable Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions in the United States as the Sellers reasonably
request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such
jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that in no event shall
Purchaser be obligated to (i) qualify generally to do business or
as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(f), (ii) file any general consent
to service of process in any jurisdiction where it is not as of
the date hereof then so subject or (iii) subject itself to
taxation in any such jurisdiction if it is not so subject.
(g) The Sellers shall furnish to Purchaser such information
regarding the Sellers (which shall not include information
regarding Purchaser required to be included by Purchaser in the
Registration Statement) and the distribution by the Sellers of
such Registrable Securities as is required by law to be disclosed
in the Registration Statement (the "Sellers' Requisite
Information"). In the event that any Seller shall have failed to
furnish to Purchaser such Sellers' Requisite Information as
required hereunder and Purchase shall file the Initial
Registration Statement or Additional Registration Statement, as
applicable, without including any of the Registrable Securities
held by such Seller pursuant to Section 2(b) hereof, Purchaser
shall have no further obligation to register such excluded shares
hereunder and such shares shall no longer constitute "Registrable
Securities" hereunder.
(h) Purchaser will use its reasonable best efforts to cause the
Registrable Securities to be listed on the Nasdaq National Market
(or such other national securities exchange on which the
Purchaser Common Stock is then listed) on or prior to the
effective date of the Registration Statement hereunder.
(i) Purchaser shall, as expeditiously as practicable, take all
reasonable steps necessary to effect the registration, offering
and sale of the Registrable Securities covered by the
Registration Statement contemplated hereby pursuant to the
Registration Statement.
(j) Purchaser shall, as expeditiously as practicable, deliver to
the Sellers as many copies of the Prospectus (including each
preliminary prospectus) included in the Registration Statement
and any amendment or supplement thereto as the Sellers may
reasonably request, and Purchaser consents (except upon and
during the continuance of any event described in
Section 3(c)(iii) or (iv)) to the use of the Prospectus or any
amendment or supplement thereto by the Sellers in connection with
the offering and sale or delivery of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto
pursuant to the Registration Statement.
4. Registration Expenses. All Registration Expenses incident
to Purchaser's performance of or compliance with this Agreement
shall be paid by Purchaser. The Sellers shall pay all Selling
Expenses incurred by the Sellers in connection with the
registration and distribution of the Registrable Securities.
5. Additional Covenants of Purchaser. Purchaser agrees with the
Sellers that, with a view to making available the benefits of
certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public
without registration, Purchaser will use its reasonable best
efforts to:
(a) File with the Commission in a timely manner all reports and
other documents required of Purchaser under the Securities Act
and the Exchange Act; and
(b) So long as the Sellers own any Registrable Securities, to
furnish to the Sellers forthwith upon request a written statement
by Purchaser as to its compliance with the reporting requirements
of said Rule 144 and of the Securities Act and the Exchange Act,
a copy of the most recent annual or quarterly report of Purchaser
and such other reports and documents of Purchaser and other
information in the possession of or reasonably obtainable by
Purchaser as the Sellers may reasonably request in availing
itself of any rule or regulation of the Commission allowing the
Sellers to sell any such securities without registration.
6. Representations, Warranties and Covenants of the Sellers.
The Sellers represent and warrant to, and agree with Purchaser
that this Agreement has been duly authorized, executed and
delivered by the Sellers.
7. Indemnification.
(a) Indemnification by Purchaser. Purchaser shall, and it hereby
agrees to, indemnify and hold harmless the Sellers, each person,
if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act and each of their respective directors, officers, employees,
trustees and agents (collectively, the "Sellers Indemnified
Parties"), against any losses, claims, damages or liabilities,
joint or several, to which the Sellers Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any preliminary,
final or summary Prospectus contained therein or furnished by
Purchaser to the Sellers, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and Purchaser shall, and it hereby agrees to,
reimburse the Sellers Indemnified Parties for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 7(a) shall not apply to
amounts paid in settlement of any such losses, claims, damages or
liabilities if such settlement is effected without the consent of
Purchaser (which consent shall not be unreasonably withheld);
provided, further, that, in the case of the Sellers, Purchaser
shall not be liable to any such person in any such case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the
Registration Statement, or preliminary, final or summary
prospectus, or amendment or supplement in reliance upon and in
strict conformity with written information furnished to Purchaser
by such person expressly for use therein; provided, further,
that, Purchaser shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) the Sellers failed to send or
deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities and
(ii) the Prospectus corrected such untrue statement or omission;
and provided, further, Purchaser shall not be liable to the
extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement or alleged untrue statement,
omission, or alleged omission is corrected in an amendment or
supplement to the Prospectus and if having previously been
furnished by or on behalf of the Sellers with copies of the
Prospectus as so amended or supplemented, the Sellers thereafter
fail to deliver such Prospectus as so amended or supplemented
prior to or concurrently with the sale of Registrable Securities
to the person asserting such loss, claim, damage, liability or
expense who purchased such Registrable Securities which is the
subject thereof from the Sellers.
(b) Indemnification by the Sellers. The Sellers shall indemnify
and hold harmless Purchaser and each person, if any, who controls
Purchaser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act and each of their respective
directors, officer, employees, trustees and agents (collectively,
the "Purchaser Indemnified Parties") against any losses, claims,
damages or liabilities to which the Purchaser Indemnified Parties
may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any preliminary,
final or summary Prospectus contained therein or furnished by
Purchaser to the Sellers, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
strict conformity with written information furnished to Purchaser
by the Sellers expressly for use therein, and the Sellers shall,
and hereby agree to, reimburse the Purchaser Indemnified Parties
for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the
indemnity obligation of each such Seller hereunder shall be
limited to and shall not exceed the proceeds actually received by
such Seller upon a sale of Registrable Securities pursuant to a
registration statement hereunder; and provided, further, that the
indemnity agreement contained in this Section 7(b) shall not
apply to amounts paid in settlement of any such losses, claims,
damages or liabilities if such settlement is effected without the
consent of the Sellers (which consent shall not be unreasonably
withheld).
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party under Section 7(a) or 7(b) above of written
notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 7, notify such indemnifying party
in writing of the commencement of such action; but the omission
so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than
under the indemnification provisions of or contemplated by
Section 7(a) or 7(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be regular outside
litigation counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying
party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation; provided, however, that if in the reasonable
judgment of a Sellers Indemnified Party a conflict of interest
exists between such Sellers Indemnified Party and any other
Sellers Indemnified Party with respect to an indemnifiable claim,
Purchaser shall be obligated to pay the reasonable fees and
expenses of one additional counsel for such Sellers Indemnified
Party.
(d) Contribution. Each party hereto agrees that, if for any
reason the indemnification provisions contemplated by
Section 7(a) or Section 7(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), 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 the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied
by such indemnifying party or by such indemnified party, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Sellers Indemnified Parties were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to in this Section 7(d). The amount paid
or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof)
referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d), each
respective Seller shall not be required to contribute any amount
in excess of the amount by which the dollar amount of the
proceeds received by it from the sale of the Registrable
Securities (after deducting any fees, discounts and commissions
applicable thereto) registered by the Registration Statement
exceeds the amount of any damages which the Sellers would have
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and
shall survive the transfer of securities.
8. Miscellaneous.
(a) Remedies. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights
granted by law. The parties hereto agree and acknowledge that
money damages are not an adequate remedy for breach of the
provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for
specific performance and for other injunctive relief in order to
enforce or prevent violation of the provisions of this Agreement.
(b) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived
only upon the prior written consent of Purchaser and the Sellers
holding a majority of the Registrable Securities at the time of
such amendment or waiver.
(c) Termination. The registration rights set forth in this
Agreement shall terminate as to any Seller at such time as all of
the Registrable Securities then held by such Seller can be sold
by such Seller in a single 3-month period in accordance with
Rule 144 under the Securities Act.
(d) Grant of Additional Registration Rights. The Sellers
acknowledge that Purchaser may acquire other companies and in the
course of such acquisitions may grant the equity owners thereof
registration rights with respect to their shares of Purchaser on
terms which would be negotiated at such time and may be
materially different than and in preference to the terms of this
Agreement but that do not materially detract from the rights of
the Sellers hereunder.
(e) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not.
Purchaser acknowledges and agrees that, in the event of the
acquisition of Purchaser by any Person, by means of merger, sale
of assets, purchase of capital stock or otherwise, Purchaser
shall cause the acquiring Person to assume Purchaser's
obligations pursuant to this Agreement. The Sellers' rights
pursuant to this Agreement may not be assigned other than to a
Person who receives Registrable Securities pursuant to a
transaction permitted by the Purchase Agreement and the other
agreements entered into in connection therewith.
(f) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the
remainder of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously
in two or more counterparts (including by means of telecopied
signature pages), any one of which need not contain the
signatures of more than one party, but all such counterparts
taken together shall constitute one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute
a part of this Agreement.
(i) Governing Law: Arbitration. This Agreement shall be
construed in accordance with, and governed in all respects by,
the internal laws of the State of New York. Except as otherwise
set forth herein, all claims between the parties hereto regarding
the subject matter of this Agreement shall be finally settled by
a board of three (3) arbitrators under the rules then in effect
of the American Arbitration Association. Judgment upon any award
rendered by the arbitrator(s) may be entered in any court having
jurisdiction. Any such arbitration shall be conducted in the
English language and held in New York, New York. Any arbitration
award shall be based on and accompanied by findings of fact and
conclusions of law and shall be conclusive as to the facts so
found. Each party shall be responsible for its respective costs
incurred in arbitration, except that costs and fees of each
arbitrator and the administrative fee of the American Arbitration
Association shall be borne equally by the parties. For purposes
of Israeli law, the provisions of this Section 8(i) shall be
deemed a binding arbitration agreement in accordance with the
Arbitration Law, 5728-1968
(j) Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when
given, and shall in any event be deemed to be given upon receipt
or, if earlier, (i) five (5) days after deposit with the U.S.
Postal Service or other applicable postal service, if delivered
by first class mail, postage prepaid, (ii) upon delivery, if
delivered by hand, (iii) two business days after the business day
of deposit with Federal Express or similar overnight courier,
freight prepaid or (iv) one business day after the business day
of facsimile transmission, if delivered by facsimile transmission
with copy by first class mail, postage prepaid, and shall be
addressed as follows, or at such other address as a party may
designate by ten (10) days' advance written notice to the other
parties to this Agreement pursuant to the provisions of this
Section 8:
(x) if to Purchaser, to:
Com21, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx, Chief Financial Officer
Facsimile No.: (000) 000-0000
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
(y) if to Sellers, to the addresses set forth on the
signature page hereof
IN WITNESS WHEREOF, the parties hereto have executed
this Registration Rights Agreement on the date first written
above.
COM21, INC.
a Delaware corporation
By:___________________________
Title:________________________
[SELLERS]
______________________________
Address:______________________
______________________
Address:______________________
______________________
Address:______________________
______________________
Address:______________________
______________________
Address:______________________
______________________
Exhibit A
SCHEDULE OF SELLERS
