EXHIBIT 4.3
SOLIGEN TECHNOLOGIES, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "AGREEMENT") is made as of this
24th day of November 1999, by and among Soligen Technologies, Inc., a Wyoming
corporation (the "COMPANY"), and the parties named on Exhibit A hereto.
A. The Company proposes to enter into a Series B Preferred Stock and
Warrant Purchase Agreement to be dated the date hereof (the "SERIES B PURCHASE
AGREEMENT") pursuant to which the Company shall sell up to Eight Million Four
Hundred and Twenty-five Thousand (8,425,000) shares of its Series B Convertible
Preferred Stock ("Series B Preferred") to the purchasers named therein (the
"Series B Purchasers") in one or more closings and issue to the Series B
Purchasers 3,622,750 Warrants and to X.X. Xxxxxx & Co., Inc., and Xxxxx Xxxxxx
498,750 Warrants, in such closings ("WARRANTS"); and
B. In order to induce the Series B Purchasers to enter into the
Series B Purchase Agreement, the Company has agreed to this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, all parties hereto agree as follows:
1. CERTAIN DEFINITIONS. All capitalized terms used and not
otherwise defined herein shall have the meanings given them in the Series B
Purchase Agreement. 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.
"COMPANY REGISTRATION STATEMENT" shall have the meaning set forth in
SECTION 5.1(a)(ii)(C).
"CONVERSION STOCK" means the Series A Common Stock and Common Stock
issued or issuable pursuant to conversion of the Preferred Stock.
"HOLDER" shall mean (i) any of the Preferred Stockholders, Warrant
Holders or Series A Common Stockholders holding Registrable Securities, and (ii)
any person holding Registrable Securities to whom the rights under this
Agreement have been transferred in accordance with SECTION 5.9 hereof.
"INITIATING HOLDERS" shall mean any Holders who in the aggregate hold
not less than Fifty-One Percent (51%) of the Registrable Securities.
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"PREFERRED STOCK" shall mean the Series B Preferred Stock.
"PREFERRED STOCKHOLDERS" shall mean the Series B Purchasers.
"WARRANT HOLDER" shall mean any Holder who holds a Warrant issued
pursuant to the Series B Purchase Agreement, including X. X. Xxxxxx & Co., Inc.,
and Xx. Xxxxxx.
"REGISTRABLE SECURITIES" means the Conversion Stock and any Common
Stock issuable to a Warrant Holder upon exercise of the Warrant and any Common
Stock of the Company issued or issuable in respect of the Conversion Stock or
Warrant upon any stock split, stock dividend, recapitalization, or similar
event, or any Common Stock otherwise issuable with respect to the Conversion
Stock or Warrant; PROVIDED, HOWEVER, that shares of Conversion Stock or shares
of Common Stock underlying the Warrants that are eligible for sale under Rule
144 in a single three-month period shall not be treated as Registrable
Securities; and PROVIDED, FURTHER, that shares of Conversion Stock or shares
underlying the Warrants or 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 public securities
transaction.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, as hereinafter defined, and the declaration
or ordering of the effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses, except as stated in
SECTION 5.4 hereof, incurred by the Company in complying with SECTIONS 5.1, 5.2
and 5.3 hereof, including, without limitation, all registration, qualification
and filing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding
(i) the compensation of regular employees of the Company which shall be paid in
any event by the Company and (ii) underwriting discounts and commissions) and
fees and expenses of one counsel for all Holders as appointed by the Holders and
reasonably acceptable to the Company.
"RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear the legend set forth in SECTION 3 hereof.
"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, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and, except as set forth under "Registration Expenses", all
reasonable fees and disbursements of counsel for any Holder.
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"SERIES A COMMON STOCK" shall mean the 404,697 additional shares of
Common Stock issued to the Series A Preferred Stockholders pursuant to that
certain Conversion Agreement, by and among the Company and the holders of
the Series A Preferred Stock, in connection with, and as a condition to, the
conversion of the Series A Preferred Stock.
"SERIES A COMMON STOCKHOLDER" shall mean any person holding Series
A Common Stock.
2. RESTRICTIONS ON TRANSFERABILITY. The Conversion Stock and any
Common Stock issuable to a Warrant Holder upon exercise of the Warrant and any
other securities issued in respect of the Conversion Stock or Warrants upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Holder will cause
any proposed purchaser, assignee, transferee, or pledgee of any such shares held
by the Holder to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Agreement.
3. RESTRICTIVE LEGEND. Each certificate representing (i) the
Conversion Stock and the Warrants and the underlying stock and (ii) any other
securities issued in respect of the Conversion Stock and the Warrants and the
underlying stock upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of SECTION 4 below) be stamped or otherwise imprinted with a legend
in substantially the following form (in addition to any legend required under
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENTS
COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
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Each Holder consents to the Company's making a notation on its records
and giving instructions to any transfer agent in order to implement the
restrictions on transfer established in this Agreement.
4. NOTICE OF PROPOSED TRANSFERS. The Holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this SECTION 4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, (ii) in transactions
involving the distribution without consideration of Restricted Securities to any
partners or members, or retired partners or members, or to the estate of a
transferor (iii) any transfer to any affiliate controlled by or under common
control with any transferor or (iv) in transactions in compliance with Rule
144), unless there is in effect a registration statement under the Securities
Act covering the proposed transfer, the holder thereof shall give written notice
to the Company of such holder's intention to effect such transfer, sale,
assignment or pledge. Each such notice shall describe the manner and
circumstances of the proposed transfer, sale, assignment or pledge in sufficient
detail, and shall be accompanied, at such holder's expense by either (i) written
opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the holder to the
Company. It is agreed that the Company will not request an opinion of counsel
for the holder for transactions made in reliance on Rule 144 under the
Securities Act except in unusual circumstances, the existence of which shall be
promptly determined in good faith by the Board of Directors of the Company.
Each certificate evidencing the Restricted Securities transferred as above
provided shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in SECTION 3 above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for such holder (if required above) and the Company such legend is not required
in order to establish compliance with any provision of the Securities Act.
5. REGISTRATION.
5.1 REQUESTED REGISTRATION.
(i) REQUEST FOR REGISTRATION. If the Company shall receive from
Initiating Holders a written request that the Company effect
any registration, qualification or compliance with respect
to at least Fifty-One Percent (51%) of the Registrable
Securities, the Company will:
(1) promptly give written notice of the proposed
registration, qualification or compliance to all other
Holders; and
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(2) will file a registration statement with the Commission
not later than 90 days following such request and, use
its reasonable best efforts to promptly effect such
registration, qualification or compliance (including,
without limitation, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations
issued under the Securities Act and any other
governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale
and distribution of all or such portion of such
Registrable Securities as are specified in such
request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request
received by the Company within fifteen (15) days after
receipt of such written notice from the Company;
PROVIDED, HOWEVER, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
SECTION 5.1:
(a) In any particular jurisdiction in which the
Company would be required to execute a general
consent to service of process in effecting such
registration, qualification or compliance unless
the Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act;
(b) Prior to nine months from the date hereof;
(c) After the Company has effected one such
registration pursuant to this SUBPARAGRAPH 5.1,
and such registration has been declared or ordered
effective and has remained effective until the
earlier to occur of ninety (90) days or the sale
of all of the securities offered pursuant to such
registration;
(d) If the Company shall furnish to such Initiating
Holders a certificate signed by the Chief
Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors,
it would be seriously detrimental to the Company
or its stockholders for a registration statement
to be filed in the near future, then the Company's
obligation to use its best efforts to register,
qualify or comply
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under this SECTION 5.1 shall be deferred for a
period not to exceed ninety (90) days from the
date of receipt of written request from the
Initiating Holders, provided that the Company
may not exercise this deferral right more than
once per twelve (12) month period. Subject to
the foregoing clauses, the Company shall file a
registration statement covering the Registrable
Securities so requested to be registered as
soon as practicable after receipt of the
request or requests of the Initiating Holders;
(ii) UNDERWRITING. If the Initiating Holders intend to
distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise
the Company as a part of their request made pursuant to
SECTION 5.1(i), and the Company shall include such
information in the written notice given pursuant to SECTION
5.1(i). The managing underwriter will be selected by a
majority in interest of the Initiating Holders, provided
that such managing underwriter is reasonably acceptable to
the Company. In such event, the right of any Holder to
include his or her Registrable Securities in such
registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided
herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter. Notwithstanding any other
provision of this SECTION 5.1, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Company shall so advise all
Holders of Registrable Securities, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement. Neither the Company nor any other holders of
Company securities may participate in the proposed offering if any Holders have
been cut back pursuant to this SECTION 5.1(ii). No Registrable Securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. To facilitate the allocation
of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the
nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other
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securities so withdrawn shall also be withdrawn from registration, and such
Registrable Securities shall continue to be subject to the terms of this
Agreement including SECTION 6 hereof.
5.2 COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time, or from time to
time, the Company shall determine to register any of its equity securities,
either for its own account or the account of a security holder or holders, other
than (i) a registration relating solely to employee benefit plans, (ii) a
registration relating solely to a Rule 145 transaction, the Company will:
(1) promptly give to each Holder written notice thereof;
and
(2) include in such registration (and any related
qualification under blue sky laws or other compliance),
and in any underwriting involved therein, all the
Registrable Securities specified in a written request
or requests, made within twenty (20) days after receipt
of such written notice from the Company, by any Holder.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to SECTION 5.2(a)(i). In such event the right of any Holder to
registration pursuant to this SECTION 5.2 shall be conditioned upon such
Holder's participation in such underwriting, and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this SECTION 5.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may exclude
some or all of the Registrable Securities, or securities of other holders of
registration rights other than persons exercising demand registration rights,
from such registration. The Company shall advise all Holders, and other holders
distributing their securities through such underwriting of any limits imposed on
their participation in the underwriting as provided in this SECTION 5.2(b). The
number of shares of Registrable Securities, or securities of other holders of
registration rights other than persons exercising demand registration rights,
that may be included in the registration and underwriting in accordance with
this SECTION 5.2(b) shall be allocated among all the Holders and such other
holders of securities not exercising demand registration rights pro rata.
If any Holder or other holder disapproves of the terms of any such
underwriting, he or she may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn
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from such registration, and shall continue to be subject to the terms of this
Agreement, including SECTION 6 hereof. Furthermore,
(i) No shareholder of the Company shall be granted any
rights superior to those granted to the Preferred
Stockholders pursuant to this SECTION 5.2 without the
prior consent of more than Fifty-One Percent (51%) of
(i) the then outstanding shares of Preferred Stock plus
(ii) if some or all of the Preferred has been converted
into Common Stock, the Conversion Stock issued pursuant
to such conversion and Shares underlying the Warrants.
(ii) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any
registration initiated by it under this SECTION 5.2
prior to the effectiveness of such registration whether
or not any Holder has elected to include securities in
such registration.
5.3 REGISTRATION ON FORM S-3.
(a) If any Holder or Holders of at least Five Percent (5%) of
the then outstanding Registrable Securities request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of all or some of the shares of the Registrable Securities held
by such Holder or Holders and the reasonably anticipated aggregate price to the
public of which, net of underwriting discounts and commissions, would exceed
FIVE HUNDRED THOUSAND DOLLARS ($500,000), and the Company is a registrant
entitled to use Form S-3 to register the Registrable Securities for such an
offering, the Company shall use its best efforts to cause such Registrable
Securities to be registered for the offering on such form and to cause such
Registrable Securities to be qualified in such jurisdictions as such Holder or
Holders may reasonably request. The Company shall inform other Holders of the
proposed registration and offer them the opportunity to participate. In the
event the registration is proposed to be part of a firm commitment underwritten
public offering, the substantive provisions of SECTION 5.1(ii) shall be
applicable to each such registration initiated under this SECTION 5.3. The
Company may include other shares of Common Stock in any of the registrations
provided for in this SECTION 5.3, provided that such inclusion will not
interfere with the marketing (including the price to the public) of the
Registrable Securities to be registered by the Holders.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this SECTION 5.3 if any of the
conditions in Section 5.1(a), (b) or (d) exist or to Blue-Sky in a jurisdiction
where in the good faith judgment of the Board of Directors, it would be
unreasonably burdensome to qualify.
5.4 EXPENSES OF REGISTRATION. Registration Expenses incurred in
connection with (i) up to one requested registrations pursuant to SECTION 5.1,
(ii) all company registrations
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pursuant to SECTION 5.2, and (iii) all Form S-3 registrations pursuant to
SECTION 5.3 shall be borne by the Company. Selling Expenses shall be borne
by the selling shareholders incurring such expenses.
5.5 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense, the Company will:
(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least ninety (90)
days or until the distribution described in the registration statement has been
completed, whichever first occurs; PROVIDED, HOWEVER, that (i) such 90-day
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company;
and (ii) in the case of any registration of Registrable Securities on Form S-3
which are intended to be offered on a continuous or delayed basis, such 90-day
period shall be extended up to a maximum total period of one year, if necessary,
to keep the registration statement effective until all such Registrable
Securities are sold, provided that Rule 415, or any successor rule under the
Securities Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Securities Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Act or (II) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15 (d) of the Securities Exchange Act of 1934 (the "1934 ACT") in the
registration statement.
(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 Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents (including amendments or supplements
thereto) as such Holders or underwriters may reasonably request in order to
facilitate the public offering of such securities.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
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
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consent to service of process in any such states or jurisdiction, unless the
Company is already subject to service in such jurisdiction. Furthermore,
(i) In the event of any underwritten public offering,
enter into and perform its obligations under an
underwriting agreement, in usual and customary form,
with the managing underwriter of such offering. Each
Holder participating in such underwriting shall also
enter into and perform its obligations under such an
agreement.
(ii) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a
prospectus relating thereto is required to be
delivered under the Act of the happening of any event
as a result of which the prospectus included in such
registration statement, as then in effect, includes
an untrue statement of a material fact or omits to
state a material fact required to be stated therein
or necessary to make the statements therein not
misleading in the light of the circumstances then
existing and as promptly as practicable amend or
supplement the prospectus to correct such
misstatement or omission.
(iii) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities
exchange on which similar securities issued by the
Company are then listed.
(iv) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder
and a CUSIP number for all such Registrable
Securities, in each case not later than the effective
date of such registration.
(v) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to
this SECTION 5.5, on the date that such Registrable
Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this
SECTION 5.5, if such securities are being sold
through underwriters, (i) an opinion, dated such
date, of the counsel representing the Company for the
purposes of such registration, in form and substance
as is customarily given to underwriters in an
underwritten public offering, addressed to the
underwriters, and (ii) a letter dated such date, from
the independent certified public accountants of the
Company, in form and substance as is customarily
given by independent certified public accountants to
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underwriters in an underwritten public offering,
addressed to the underwriters.
(vi) In the event of any underwritten public offering,
cooperate with the Holders requesting registration
pursuant to this Section, the underwriters
participating in the offering and their counsel in
any due diligence investigation reasonably requested
by the Holders or the underwriters in connection
therewith, and participate, to the extent reasonably
requested by the managing underwriter for the
offering or the Holders, in efforts to sell the
Registrable Securities under the offering (including
without limitation, participating in "roadshow"
meetings with prospective investors) that would be
customary for underwritten primary offerings of a
comparable amount of equity securities by the
Company.
5.6 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of such
Holder's officers, directors, members, partners, legal counsel and agent, and
each person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, 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 of the Securities Act of 1933, the Securities Exchange Act of 1934,
state securities law or any rule or regulation promulgated under such laws
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of such Holder's officers and directors, and members, partners, legal
counsel, agents and each person controlling such Holder, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending of any such claim, loss, damage, liability
or action, provided that the Company will 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 or alleged utrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder,
controlling person or underwriter and stated to be specifically for use therein.
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(b) Each Holder severally, and not jointly will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of such Holder's officers and
directors and each person controlling such Holder within the meaning of Section
15 of the Securities Act, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or 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, and
will reimburse the Company, such Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) 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 an instrument
duly executed by such Holder and stated to be specifically for use therein. Not
withstanding the foregoing, the liability of each Holder under this
SUBSECTION 5.6(b) shall be limited in an amount equal to the net proceeds
received from the sale of the shares sold by such Holder.
(c) Each party entitled to indemnification under this SECTION
5.6 (the "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 litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
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 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses. 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 a release from all liability in respect to such claim or
litigation or which includes an admission of fault on behalf of the Indemnified
Party.
(d) If the indemnification provided for in this SECTION 5.6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of
12
indemnifying such Indemnified Party hereunder, shall to the extent permitted
by applicable law contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and
of the Indemnified Party shall be determined by a court of law by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to the
information supplied by the Indemnifying Party or by the Indemnified Party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount to be contributed by any Holder
under this SECTION 5.6(d) shall be limited to an amount equal to the net
proceeds received from the sale of the shares sold by such Holder.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and the Holders under this
SECTION 5.6 shall survive completion of any offering of Registrable Securities
in a registration statement and the termination of this Agreement. No
Indemnifying Party 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 each Indemnified Party of a release from all liability in respect to such
claim or litigation; provided, that no Indemnified Party shall consent to entry
of any judgment or enter into any settlement without the consent of Indemnifying
Party. No person guilty of fraudulent misrepresentations (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation.
5.7 INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
5.8 RULE 144 REPORTING. 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 Restricted Securities to the public without registration, the
Company agrees to use all reasonable efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date
13
that the Company becomes subject to the reporting requirements of the
Securities Act or the 1934 Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the 1934
Act (at any time after it has become subject to such reporting requirements);
and
(c) So long as the Holder owns any Restricted Securities to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such securities
without registration.
5.9 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company
to register securities granted to the Holders under SECTIONS 5.1, 5.2 and 5.3
may be assigned to a transferee or assignee in connection with (a) any transfer
or assignment of Fifty Thousand (50,000) (as adjusted for stock splits, stock
dividends, recapitalizations and the like) or more shares of Registrable
Securities by the Holder to one or more persons in a single transaction or
series of related transactions, provided that (i) the Company is given notice
thereof and the transferee covenants to be bound by the provisions of this
Agreement and (ii) such transfer may otherwise be affected in accordance with
applicable securities laws or (b) any transfer or assignment of Registrable
Securities by the Holder to partners, members or affiliates of such Holder.
5.10 SUBSEQUENT REGISTRATION RIGHTS. From and after the date of this
Agreement, the Company shall not grant any registration rights to subsequent
purchasers of the Company's equity securities that are, in the good faith
judgment of the Company's Board of Directors, superior to the registration
rights granted to the Preferred Stockholders hereunder without the prior written
consent of the holders of at least Fifty One Percent (51%) of the Registrable
Securities.
6. AMENDMENT. Any provision of this Agreement may be amended or the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the holders of not less than a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this SECTION 6 shall be binding upon each Preferred Stockholder and each Holder
of Registrable Securities at the time outstanding (including securities into
which such securities are convertible), each future holder of all such
securities, and the Company.
14
7. GOVERNING LAW. This Agreement and the legal relations between
the parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California, without respect to rules concerning
the conflict of laws which would otherwise require application of the
substantive law of another jurisdiction. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California
matters with respect to the breach or interpretation of this Agreement or the
enforcement of any and all rights, duties, liabilities, obligations, powers, and
other relations between the parties arising under this Agreement.
8. ENTIRE AGREEMENT. This Agreement, together with all Exhibits
hereto, constitute the full and entire understanding and agreement between the
parties regarding the matters set forth herein. Except as otherwise expressly
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.
9. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or three (3) days after
deposit with the United States mail, by registered or certified mail, postage
prepaid, addressed (a) if to a Preferred Stockholder, at such Preferred
Stockholder's address as set forth on the Schedule of Preferred Stockholders
attached hereto, or at such other address as such Preferred Stockholder shall
have furnished to the Company in writing in accordance with this SECTION 9, (b)
if to any other holder of Conversion Stock or Warrant Holder, at such address as
such holder shall have furnished the Company in writing in accordance with this
SECTION 9 or to the address set forth in the Series B Purchase Agreement, or,
until any such holder so furnishes an address to the Company, then to and at the
address of the last holder thereof who has so furnished an address to the
Company, or (c) if to the Company, at its principal office.
10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
15
The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
SOLIGEN TECHNOLOGIES, INC.
By
-------------------------------
Xxxxxxx Xxxxx
Chief Executive Officer
16
SIGNATURE PAGE
"SERIES B PURCHASERS"
---------------------------------------
Name of Purchaser
By
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
17
SIGNATURE PAGE
"SERIES A COMMON STOCKHOLDER"
---------------------------------------
Name of Series A Common Stockholder
18
EXHIBIT A
TO INVESTOR RIGHTS AGREEMENT
-----------------------------------------------------------------------------
PURCHASER SUBSCRIPTION PRICE PER TOTAL UNIT
FOR UNITS* UNIT PRICE
-----------------------------------------------------------------------------
Xxxx X. Xxxxxxxx 750 $20.00 $15,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxx 5,750 $20.00 $115,000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx 5,750 $20.00 $115,000
-----------------------------------------------------------------------------
Xx. Xxxxxxxx X. Brilliant 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxxx X. Xxxxx 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Casting Technology Partnership 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Xxxx X. Xxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxx Xxxxx 1,000 $20.00 $20,000
-----------------------------------------------------------------------------
Xxxx X. Xxxxxx 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Xxxxx Feteth, M.D. 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx 1,500 $20.00 $30,000
-----------------------------------------------------------------------------
Xxxx Xxxxxxx Xxxxxxxx 500 $20.00 $10,000
-----------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxx 3,750 $20.00 $75,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxx 4,750 $20.00 $95,000
-----------------------------------------------------------------------------
Xxxx X. Xxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxx Family Trust 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
19
-----------------------------------------------------------------------------
X.X. Xxxxxxx, Inc. 12,500 $20.00 $250,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxx 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Koyah Leverage Partners, L.P. 5,500 $20.00 $110,000
-----------------------------------------------------------------------------
Koyah Partners, L.P. 2,000 $20.00 $40,000
-----------------------------------------------------------------------------
Xxxx and Xxxxxx Xxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxx 500 $20.00 $10,000
-----------------------------------------------------------------------------
Xxxx Xxxx 1,000 $20.00 $20,000
-----------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxx Xxxxxxx 500 $20.00 $10,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxx 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 1,250 $20.00 $25,000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 6,000 $20.00 $120,000
-----------------------------------------------------------------------------
Summit Securities, Inc. 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
Western United Life Assurance, Inc. 2,500 $20.00 $50,000
-----------------------------------------------------------------------------
TOTAL: $1,685,000.00
-----------------------------------------------------------------------------
*Each UNIT consists of 100 shares of Series B Convertible Preferred Stock and
43 Warrants to purchase one share of Common Stock, as per form of Warrant in
Exhibit F.
Pursuant to the Agreement to which this Schedule is attached, X.X. Xxxxxx &
Co., Inc. and Xxxxx Xxxxxx are acquiring from the Company as part of this
transaction an aggregate of 498,750 Warrants which are to be allocated as
follows:
20
NAME AMOUNT OF WARRANTS
---- ------------------
Xxxxx Xxxxxx 224,438
X.X. Xxxxxx & Co., Inc. 205,734
Xxxx X. Xxxxxx 68,578
The persons in the foregoing table and the Purchasers listed above are all
deemed and referred to as Warrant Holders.
Pursuant to the Conversion Agreement, 404,697 shares of Common Stock are to be
allocated as follows:
NAME NUMBER OF SHARES
---- ----------------
ICM Asset Management, Inc. 46,059
Koyah Partners, L.P. 64,755
Koyah Leverage Partners, L.P. 293,883
-------
404,697
21
EXHIBIT B
TO INVESTOR RIGHTS AGREEMENT
STOCKHOLDERS AND WARRANT HOLDERS
The following table lists the number of shares of capital stock
(including Warrants) of the Company subject to the provisions of this Agreement
as of the date hereof.
-------------------------------------------------------------------------------
Warrant Shares
Name Series B Shares
-------------------------------------------------------------------------------
XXXX X. XXXXXXXX 32,250 75,000
-------------------------------------------------------------------------------
XXXXX X. XXXXX 247,250 575,000
-------------------------------------------------------------------------------
XXXXXX X. XXXXXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXXX X. XXXXXX 247,250 575,000
-------------------------------------------------------------------------------
XX. XXXXXXXX X. BRILLIANT 53,750 125,000
-------------------------------------------------------------------------------
XXXXXXX X. XXXXX 107,500 250,000
-------------------------------------------------------------------------------
CASTING TECHNOLOGY PARTNERSHIP 107,500 250,000
-------------------------------------------------------------------------------
XXXX X. XXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXX XXXXXX 43,000 100,000
-------------------------------------------------------------------------------
XXXX X. XXXXXX 107,500 250,000
-------------------------------------------------------------------------------
XXXXX FETETH, M.D. 107,500 250,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXXXX 64,500 150,000
-------------------------------------------------------------------------------
XXXX XXXXXXX XXXXXXXX 21,500 50,000
-------------------------------------------------------------------------------
XXXXXXX X. XXXXXXXX 161,250 375,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXX 204,250 475,000
-------------------------------------------------------------------------------
XXXX X. XXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXX FAMILY TRUST 53,750 125,000
-------------------------------------------------------------------------------
X.X. XXXXXXX, INC. 537,500 1,250,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXX 107,500 250,000
-------------------------------------------------------------------------------
KOYAH LEVERAGE PARTNERS, L.P. 236,500 550,000
-------------------------------------------------------------------------------
KOYAH PARTNERS, L.P. 86,000 200,000
-------------------------------------------------------------------------------
XXXX AND XXXXXX XXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXXX X. XXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXX 21,500 50,000
-------------------------------------------------------------------------------
XXXXXXX X. XXXX 43,000 100,000
-------------------------------------------------------------------------------
XXXXXXXXX X. XXXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXX X. XXXXXXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXX XXXXXXX 21,500 50,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXX 107,500 250,000
-------------------------------------------------------------------------------
XXXXX X. XXXXXXX 53,750 125,000
-------------------------------------------------------------------------------
XXXXXX X. XXXXXX 258,000 600,000
-------------------------------------------------------------------------------
SUMMIT SECURITIES, INC. 107,500 250,000
-------------------------------------------------------------------------------
22
-------------------------------------------------------------------------------
Warrant Shares
Name Series B Shares
-------------------------------------------------------------------------------
WESTERN UNITED LIFE ASSURANCE, INC. 107,500 250,000
-------------------------------------------------------------------------------
XXXXX XXXXXX 224,438 0
-------------------------------------------------------------------------------
X.X. XXXXXX & CO., INC. 205,734 0
-------------------------------------------------------------------------------
XXXX X. XXXXXX 68,578 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTALS 4,121,500 8,425,000
-------------------------------------------------------------------------------
23
