Exhibit 10.2
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
dated as of August 16, 2001, by and between CONSTELLATION 3D, INC., a Delaware
corporation, with headquarters located at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Company"), and THE GLENEAGLES FUND COMPANY II, an
exempted company organized and existing under the laws of the Cayman Islands,
having an office at x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx Xxxxxxx) Ltd., Corporate
Center, West Bay Road, P.O. Box 31106 SMB, Grand Cayman, Cayman Islands, British
West Indies (together with its successors in interest and assigns or its
designees, the "Purchaser").
WHEREAS:
A. The Company and the Purchaser entered into a Registration Rights
Agreement dated as of August 13, 2001 which the parties now wish to amend and
restate in its entirety;
B. In connection with the Amended and Restated Common Stock Purchase
Agreement by and between the Company and the Purchaser of even date herewith
(the "Purchase Agreement"), the Company has agreed, upon the terms and subject
to the conditions of the Purchase Agreement, to issue and sell to the Purchaser
(i) certain shares of the Company's common stock, par value $0.00001 per share
(the "Common Stock"), pursuant to an effective Registration Statement (as
defined below), (ii) a Warrant (the "Warrant") to purchase 52,000 shares of
Common Stock, and (iii) an Adjustment Warrant (the "Adjustment Warrant")
exercisable for a number of shares of Common Stock as determined by the formula
set forth therefore in the Adjustment Warrant;
C. The Company is filing a registration statement on Form S-3 with
the Securities and Exchange Commission (the "SEC") pursuant to the 1933 Act (as
defined below) and Rule 415 thereunder; and
D. To induce the Purchaser to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain rights with respect to the
Registration Statement under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser hereby agree to amend and restate the Registration Rights Agreement
dated as of August 13, 2001 to read as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following meanings:
(a) "Holder" means the Purchaser and any transferee or assignee
thereof to whom the Purchaser assigns its rights under this Agreement and the
Purchase Agreement and who agrees to become bound by the provisions of this
Agreement and the Purchase Agreement in accordance with Section 8.
(b) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
(c) "Register," "registered" and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the SEC.
(d) "Registered Securities" means (i) all of the shares of Common
Stock issued or issuable pursuant to the Purchase Agreement (including, without
limitation, the Initial Shares) and the shares of Common Stock issued or
issuable upon exercise of the Warrant and the Adjustment Warrant; (ii)
securities issued or issuable upon any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise with respect to such
shares of Common Stock; and (iii) any other security issued as a dividend or
other distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses; in each case regardless of any
limitation on the Purchaser's right or obligation to purchase the maximum number
of shares of Common Stock provided for under the Purchase Agreement, the Warrant
and the Adjustment Warrant.
(e) "Registration Statement" shall mean a registration statement
to be filed by the Company with the SEC pursuant to Rule 415 on Form S-3 under
the 1933 Act covering the resale of the Registered Securities.
(f) Capitalized terms used but not defined herein shall have the
meanings specified in the Purchase Agreement.
2. REGISTRATION.
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(a) Mandatory Registration. The Company represents, warrants and
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covenants that it will file a Registration Statement on Form S-3 with the SEC,
all in compliance with the 1933 Act and Rule 415(a)(1)(i) and (iii) thereunder,
covering the resale by the Purchaser of the Registered Securities, on or prior
to the thirty (30) day anniversary of this Agreement and use its commercially
best efforts to have such Registration Statement declared effective by the SEC
as soon thereafter as possible.
(b) Counsel. Subject to Section 5 hereof, in connection with any
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offering of the Registered Securities pursuant to the Registration Statement,
the Holders shall have the right to select one legal counsel to administer the
interests of all the Holders in the offering. The Company shall reasonably
cooperate with any such counsel.
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3. RELATED OBLIGATIONS.
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At all times that the Company is obligated to maintain the
Registration Statement effective, the Company will use its commercially best
efforts to effect and maintain the registration of the Registered Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:
(a) The Company shall keep the Registration Statement (covering
all Registered Securities) effective pursuant to Rule 415 at all times during
the period beginning on the date ("Required Effective Date") on which the
Registration Statement is declared effective by the SEC and ending on the later
of (I) the twenty-six (26) month anniversary of the Required Effective Date,
(II) the fifth (5th) anniversary of this Agreement, and (III) the date on which
all Registered Securities are able to be sold publicly by the Holder pursuant to
Rule 144(k) (or any successor regulation) promulgated under the 1933 Act
(collectively, the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, shall comply with the provisions of the 1933 Act with respect to
the disposition of all Registered Securities of the Company covered by such
Registration Statement until such time as all of such Registered Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement.
(c) Subject to Section 3(h)(ii), the Company shall furnish to each
Holder and one legal counsel representing all Holders without charge (i)
promptly after the same is prepared and filed with the SEC, such number of
copies as such Holder may reasonably request of such Registration Statement and
any amendment(s) and supplements thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits, the
prospectus included in such Registration Statement (including each prospectus
supplement) and, with regards to such Registration Statement(s), any
correspondence by or on behalf of the Company to the SEC or the staff of the SEC
and any correspondence from the SEC or the staff of the SEC to the Company or
its representatives and (ii) such other documents, including copies of any final
prospectus and supplements thereto, as such Holder may reasonably request from
time to time in order to facilitate the disposition of the Registered Securities
owned by such Holder.
(d) Immediately after becoming aware of the existence of such
event, the Company shall notify (subject to Section 3(h)(ii)) each Holder by
telephone and in writing (the "Materiality Notice") that the prospectus included
in a Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be
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stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Thereafter, the
Company shall either:
(A) promptly prepare a supplement or amendment to such
Registration Statement (which, if such Registration
Statement is on Form S-3, may consist of a document
to be filed by the Company with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
and to be incorporated by reference in the
prospectus) to correct such untrue statement or
omission, and deliver ten (10) copies of such
supplement or amendment to each Holder (or such other
number of copies as such Holder may reasonably
request), or
(B) immediately notify the Purchaser in writing and by
telephone that the Company does not intend to
prepare and file such a supplement or amendment to
the Registration Statement at the current time
because, as certified by the president of the
Company, in the good faith judgment of the Board
of Directors of the Company (after consultation with
its appropriate professional advisors), it would be
seriously detrimental (assuming such detriment is
the cause of the Materiality Notice) to the Company
for such supplement or amendment to be filed in the
near future and is therefore essential to defer
filing of such supplement or amendment until such
time (subject to the proviso in the next sentence)
as such deferment is no longer essential (such
notice being referred to herein as a "Suspension
Notice"). Upon the Company's delivery of a Suspension
Notice to the Purchaser, the Company's rights and
obligations to sell Drawdown Shares to the Purchaser
and the Purchaser's obligation to buy Drawdown
Shares from the Company shall each be suspended
until such time as (i) the Company files a supplement
or amendment to the Registration Statement
in accordance with clause (A) above, or (ii) the
filing of such supplement or amendment is no longer
necessary to render the Registration Statement and
prospectus current and deliverable (the period
beginning upon the delivery of a Suspension Notice
and ending upon the satisfaction of clause (i) or
(ii) above being a "Suspension Period"); provided
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that no such Suspension Period shall be more than
ten (10) consecutive Trading Days or an aggregate of
thirty (30) Trading Days in any twelve (12) month
period.
If a Suspension Notice is delivered by the Company to the
Purchaser during an existing Purchase Period, that Purchase Period shall
immediately terminate. The Company's obligation to deliver to the Purchaser any
shares of Common Stock previously purchased by the Purchaser pursuant to the
Purchase Agreement with respect to which there has not been a Closing shall not
be affected or relieved in any way as a result of this Section 3(d). Without
limiting the foregoing, if the Company delivers a Suspension Notice either (i)
within an existing Purchase Period or (ii) within ten (10) Trading Days of the
end of the previous Purchase Period, and the Purchaser has purchased shares of
Common Stock which the Purchaser has not resold by the time the Suspension
Notice is received, then the Purchaser may (but shall not be obligated to)
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resell any or all of such shares of Common Stock to the Company for cash at a
price equal to the Payment Amount. Such resale shall occur on the third Trading
Day after the Purchaser gives notice to the Company of its intention to resell
such shares of Common Stock. The Purchaser may exercise this resale right one or
multiple times.
The Company shall immediately notify (subject to Section 3(h)(ii)
below) the Purchaser in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to the Purchaser by facsimile on the same
day of such effectiveness and by overnight mail), (ii) of any request by the SEC
for amendments or supplements to a Registration Statement or related prospectus
or related information, and (iii) of the Company's reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.
(e) The Company shall use its commercially best efforts to prevent
the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registered Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify (subject to Section 3(h)(ii)) each
Holder who holds Registered Securities being sold of the issuance of such order
and the resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.
(f) Subject to Section 3(h)(ii), the Company shall permit each
Holder, Inspector (as defined below) and/or Purchaser's counsel, to review and
comment upon a Registration Statement and all amendments and prospectus
supplements thereto at least three (3) business days prior to their filing with
the SEC, and not file any document in a form to which such counsel reasonably
objects. Without limiting Section 3(h)(iii), the Company shall not submit to the
SEC any Registration Statement, amendment or prospectus supplement thereto
without the prior approval of such Holder or its counsel.
(g) Subject to Section 3(h)(ii), the Company shall make available
for inspection by (i) any Holder and (ii) its attorneys and accountants or other
agents or Persons retained or designated by the Holders (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Holder or
Inspector may reasonably request. The Purchaser agrees (to the extent it has
approved receipt of non-public information pursuant to Section 3(h)(ii)) to keep
confidential (and to cause its Inspectors and counsel to keep confidential and
execute mutually acceptable non-disclosure agreements with the Company that are
not inconsistent with the terms of the Transaction Documents) all non-public
information and Records received pursuant to Section 3(h)(ii) which the Company
determines in good faith to be confidential, and of which determination the
Holder and Inspectors are so notified, unless such information or Records are
permitted to be disclosed under the standards specified in clauses (i) to (iv)
of Section 3(p) below.
(h) Due Diligence Review. (i) Subject to Section 3(h)(ii), the
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Company shall make available, during normal business hours, for inspection and
review by the Purchaser,
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its Inspectors (who may or may not be affiliated with the Purchaser), any
underwriter participating in any disposition of Common Stock on behalf of the
Purchaser pursuant to the Registration Statement or amendments or prospectus
supplements thereto or any blue sky, NASD or other filing, all financial and
other records, all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as the Purchaser may request
for the purpose of such review, and cause the Company's officers, directors and
employees to promptly supply all such information requested by the Purchaser or
its Inspectors or any underwriter in connection with such Registration Statement
(including, without limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from time to time
after the filing and effectiveness of the Registration Statement for the sole
purpose of enabling the Purchaser and its Inspectors and any underwriters and
their respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of the Registration
Statement.
(ii) Notwithstanding any other provision of any of the
Transaction Documents, the Company shall not directly or indirectly disclose
material nonpublic information to the Purchaser or its Inspectors unless prior
to disclosure of such information the Company identifies such information as
being material nonpublic information (without conveying the substance of such
nonpublic information) and provides the Purchaser and its Inspectors with the
opportunity to accept or refuse to accept such material nonpublic information
for review; except that the Company may disclose material nonpublic information
without such prior acceptance to Inspectors unaffiliated with the Purchaser who
are conducting diligence at the Company's facility(ies), so long as
simultaneously with such disclosure, the Company identifies to those Inspectors
the portions of such information which are material and nonpublic. If material
nonpublic information is provided by the Company or its representatives or
advisors in violation of this Section 3(h)(ii), the Purchaser may require that
the Company disclose such information to the public within 2 Trading Days of the
Purchaser's demand therefore. If the Purchaser accepts such material nonpublic
information, the Company will provide such information only to the Inspector
designated by the Purchaser. Nothing in the Transaction Documents shall entitle
the Company to withhold non-public information accepted pursuant to this Section
3(h)(ii).
(iii) Subject to Section 3(h)(ii), the Company will
immediately notify the Inspectors and, if any, underwriters, of any event or the
existence of any circumstance of which it becomes aware, constituting nonpublic
information (whether or not requested of the Company specifically or generally
during the course of due diligence or otherwise by any such persons or
entities), which, if not disclosed in the prospectus included in the
Registration Statement, would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements therein, in light of the circumstances in which they were
made, not misleading. In no event shall the Purchaser's Inspectors receiving
nonpublic information pursuant to Section 3(h)(ii) disclose to the Purchaser the
nature of the specific event or circumstances constituting any nonpublic
information discovered by such advisors or representatives in the course of
their due diligence without the written consent of the Purchaser prior to
disclosure of such information. The Purchaser's Inspectors shall make complete
disclosure to the Purchaser's independent counsel of all events or circumstances
constituting nonpublic information discovered by such Inspectors in the course
of their due diligence upon which such Inspectors form the opinion that the
Registration Statement contains an untrue statement of a material fact or omits
a material fact required to be stated in the Registration
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Statement or necessary to make the statements contained therein, in the light of
the circumstances in which they were made, not misleading. Upon receipt of such
disclosure, the Purchaser's independent counsel shall consult with the Company's
independent counsel (who, for all purposes of this Agreement, must be an
independent law firm with substantial experience in underwritten offerings which
is reasonably acceptable to the Purchaser) in order to address the concern
raised as to the existence of a material misstatement or omission and to discuss
appropriate disclosure with respect thereto.
(i) Without limiting the Company's obligations under the Purchase
Agreement, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registered Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Holders may reasonably request and registered in such
names of the Persons as the Holders may request.
(j) If requested by the Holders holding a majority of the
Registered Securities, the Company shall (i) as soon as practical incorporate in
a prospectus supplement or post-effective amendment such information as such
Holders reasonably determine should be included therein relating to the sale and
distribution of Registered Securities, including, without limitation,
information with respect to the offering of the Registered Securities to be sold
in such offering; (ii) make all required filings of such prospectus supplement
or post-effective amendment as soon as notified of such matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any Registration Statement if reasonably
requested by such Holders for such matters.
(k) The Company shall use its best efforts to cause the Registered
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registered Securities.
(l) The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 0000 Xxx) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of any Registration Statement.
(m) The Company shall comply with all applicable rules and
regulations of the SEC and any other regulatory authorities of competent
jurisdiction in connection with any registration hereunder.
(n) Immediately after the Registration Statement is declared
effective the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registered Securities (with
copies to the Holders whose Registered Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
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(o) The Company shall take all other reasonable actions necessary
to expedite and facilitate disposition by the Holders of Registered Securities
pursuant to a Registration Statement.
(p) The Company shall hold in confidence and not make any
disclosure of information concerning a Holder provided to the Company unless and
except to the extent that (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is sought pursuant
to a legal process, including without limitation, subpoena, interrogatory,
request for documents or information, civil investigative demand, deposition or
similar process, or a court of competent jurisdiction or by a governmental,
quasi-governmental, regulatory or administrative entity, provided that the
Company shall immediately notify such Holder of the existence, terms and
circumstances of such request, and the Company shall reasonably cooperate with
such Holder in attempting to (a) prevent or limit such disclosure and (b) obtain
confidential treatment of any information required to be disclosed, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of the Company's obligations under the Transaction
Documents or any other agreement or otherwise. The Company agrees that it shall,
upon learning that disclosure of such information concerning a Holder is sought
in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Holder and allow such Holder, at the
Holder's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.
(q) The Company shall engage a transfer agent and registrar for
all the Registered Securities not later than the effective date of the first
Registration Statement filed pursuant hereto.
4. OBLIGATIONS OF THE HOLDERS.
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Each Holder agrees that, upon receipt of any written notice
from the Company of the happening of any event of the kind described in Section
3(e) or the first sentence of 3(d), such Holder will immediately discontinue
disposition of Registered Securities pursuant to any prospectus in the
Registration Statement(s) covering such Registered Securities until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or the first sentence of 3(d).
5. EXPENSES OF REGISTRATION.
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All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualification fees, printers and accounting fees, and
fees and disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for all the Holders shall be paid by the Company.
6. INDEMNIFICATION.
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(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Holder, the directors,
officers, partners, employees,
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members, agents, representatives of, and each Person, if any, who controls,
any Holder within the meaning of the 1933 Act or the Exchange Act, (each, an
"Indemnified Person"), from and against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, attorneys' fees and
disbursements, amounts paid in settlement or expenses, joint or several,
(collectively, "Claims") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("Indemnified Damages"),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registered Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which the statements therein were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the Exchange Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registered Securities pursuant to a Registration Statement
(the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"), or (iv) enforcement of this indemnification. The Company shall
reimburse the Holders and each such controlling Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees and
disbursements or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim to the extent arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person
expressly for inclusion in the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made available by
the Company pursuant to Section 3(c); (ii) shall not be available to the extent
such Claim is based on (a) a failure of the Holder to deliver or to cause to be
delivered the current prospectus made available by the Company, (b) the
Indemnified Person's use of an incorrect prospectus after and despite being
promptly advised in advance by the Company in writing not to use such incorrect
prospectus or (c) the failure of the Indemnified Person to be registered with
the SEC as a broker-dealer; and (iii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld,
delayed or conditioned. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registered Securities by the Holders
pursuant to Section 8.
(b) In connection with any Registration Statement in which a
Holder is participating, each such Holder agrees, severally and not jointly, to
indemnify, hold harmless and
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defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers who signs the
Registration Statement, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the Exchange Act (collectively and together with an
Indemnified Person, an "Indemnified Party"), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the
Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for
inclusion in such Registration Statement; and, subject to Section 6(c), such
Holder will reimburse the reasonably incurred legal expenses of one counsel or
other expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
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contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Holder, which consent shall not be unreasonably withheld, delayed or
conditioned; provided, further, however, that the Holder shall be liable under
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this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net profits to such Holder as a result of the sale of Registered
Securities under such Registration Statement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registered
Securities by the Holders pursuant to Section 8. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement or threat of
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires and can reasonably establish its
financial ability to meet its indemnity obligations, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
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Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses thereof to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The indemnifying
party shall pay for only one separate legal counsel for the Indemnified Persons
or the Indemnified Parties, as applicable, and such counsel shall be selected by
the Purchaser, if the Holders are entitled to indemnification hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any
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such Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such Claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all times as
to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its written consent; provided, however,
-------- -------
that the indemnifying party shall not unreasonably withhold, delay or condition
its consent. No indemnifying party shall, without the consent of the Indemnified
Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such Claim.
Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is materially prejudiced in its ability to
defend such action.
(d) The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
(e) The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION.
------------
To the extent any indemnification by an indemnifying party is
prohibited or limited by law or otherwise, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law or
otherwise; provided, however, that: (i) no contribution shall be made under
-------- -------
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (ii) no seller of Registered
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any seller of
Registered Securities who was not guilty of fraudulent misrepresentation; and
(iii) contribution by any Holder shall be limited in amount to the net amount of
profits received by such Holder from the sale of such Registered Securities
under such Registration Statement.
8. ASSIGNMENT OF REGISTRATION RIGHTS.
---------------------------------
The rights under this Agreement shall be automatically assignable
by any Holder in their entirety or in part to any transferee of all or any
portion of the Registered Securities owned by such Holder, provided that such
Holder gives prior notice to the Company of (a) the
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name and address of such transferee or assignee, and (b) the Registered
Securities with respect to which such registration rights are being transferred
or assigned, and such Holder agrees to be bound by the terms and conditions of
this Agreement with respect to such Registered Securities. Notwithstanding
anything to the contrary contained in the Transaction Documents, the Purchaser
shall be entitled to pledge the Purchased Shares, the Warrant and the Warrant
Shares in connection with a bona fide margin account.
9. AMENDMENT OF REGISTRATION RIGHTS.
--------------------------------
Provisions of this Agreement may be amended and 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,
the Purchaser and Holders who hold fifty percent (50%) of the Registered
Securities. Any amendment or waiver effected in accordance with this Section 9
shall be binding upon each Holder and the Company.
10. MISCELLANEOUS.
-------------
(a) A Person is deemed to be a Holder of Registered Securities
whenever such Person owns of record such Registered Securities. If the Company
receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registered Securities, the Company shall act upon the
basis of instructions, notice or election received from the registered owner of
such Registered Securities.
(b) Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement (which must
be given subject to Section 3(h)(ii)) must be in writing, must be delivered by
(i) courier, mail or hand delivery or (ii) facsimile, and will be deemed to have
been delivered upon receipt. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Constellation 3D, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xx. Xxxxxxxx Xxxxxxxxxx
with a copy to:
Blank Rome Xxxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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If to the Purchaser:
The Gleneagles Fund Company II
c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 212-986-8866
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Each party shall provide five (5) days prior written notice to
the other party of any change in address, telephone number or facsimile number.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a nationally recognized overnight delivery service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF
NEW YORK, CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED
HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO
ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT,
ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING BY MAILING A COPY
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THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
IF ANY PROVISION OF THIS AGREEMENT SHALL BE INVALID OR UNENFORCEABLE IN ANY
JURISDICTION, SUCH INVALIDITY OR UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY
OR ENFORCEABILITY OF THE REMAINDER OF THIS AGREEMENT IN THAT JURISDICTION OR THE
VALIDITY OR ENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT IN ANY OTHER
JURISDICTION.
(e) This Agreement and the Purchase Agreement and the documents
contemplated hereby and thereby constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the Purchase
Agreement and the documents contemplated hereby and thereby supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(f) Subject to the requirements of Section 8, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations to be made by the
Holders pursuant to this Agreement shall be made, unless otherwise specified in
this Agreement, by Holders holding a majority of the Registered Securities.
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(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(l) Nothing in this Agreement shall confer any rights upon any
person or entity other than the parties hereto and their respective successors
and assigns.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: PURCHASER:
CONSTELLATION 3D, INC. THE GLENEAGLES FUND COMPANY II
By: /s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------- ----------------------------------
Name: Xxxxxxxx Xxxxxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Chief Financial Officer Title: Counsel
The Palladin Group, L.P.
Attorney-in-fact
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EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
The Gleneagles Fund Company
c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
Re: CONSTELLATION 3D, INC.
---------------------
Ladies and Gentlemen:
We are counsel to Constellation 3D, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Amended and Restated Common Stock Purchase Agreement (the "Purchase Agreement")
dated August 16, 2001 entered into by and between the Company and The Gleneagles
Fund Company II (the "Purchaser") pursuant to which the Company may, from time
to time, issue to the Purchaser shares of the Company's common stock, par value
$.00001 per share ("Common Stock"), and has issued Warrants to purchase shares
of Common Stock ("Warrant Shares") and Adjustment Warrants exercisable for
shares of Common Stock ("Adjustment Shares"). On ____________ ___, 2001, the
Company filed a Registration Statement on Form S-3 (File No. ___-______) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the shares of Common Stock issuable under the Purchase
Agreement, the Adjustment Shares and the Warrant Shares.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge as
of the date hereof, after telephonic inquiry of a member of the SEC's staff,
that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC, and
the shares of Common Stock issued or issuable under the Purchase Agreement
(including, without limitation, the Initial Shares), the Warrant Shares and the
Adjustment Shares are available for issuance and sale under the 1933 Act
pursuant to the Registration Statement.
Very truly yours,
[LAW FIRM]
By:
-----------------------------
cc: Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
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