REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
This
Registration Rights Agreement (this "Agreement") is made and
entered into as of September 30, 2008, by and among India Globalization Capital,
Inc., a Maryland corporation (the "Company"), and the investors
signatory hereto (each a "Investor" and collectively,
the "Investors").
This
Agreement is made pursuant to the Note and Share Purchase Agreement, dated as of
the date hereof, among the Company and the Investors (the "Purchase
Agreement").
The
Company and the Investors hereby agree as follows:
1. Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have
the respective meanings set forth in this Section 1:
“Affiliate” shall have the
meaning given such term in Rule 144.
"Common Stock" means the
Common Stock, par value $0.0001 per share, of the Company.
"Effective Date" means the
date that the Registration Statement filed pursuant to Section 2(a), 2(b) or
2(c) is first declared effective by the Commission.
“Effectiveness Date” means:
(a) with respect to the initial Registration Statement required to be filed to
cover the resale by the Holders of the Registrable Securities, the earlier of:
(i) the 75th day following the Closing; provided, that, if
the Commission reviews and has written comments to the filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (a)(i) shall
be the 105th day following the Closing, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that the initial
Registration Statement will not be reviewed or is no longer subject to further
review and comments, and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b) or 2(c) hereof, the
earlier of: (i) the 90th day following the date on which the Company first
knows, or reasonably should have known, that such additional Registration
Statement is required under such Section; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (b)(i) shall
be the 120th day following the date that the Company first knows, or reasonably
should have known, that such additional Registration Statement is required under
such Section and (ii) the fifth Trading Day following the date on which the
Company is notified by the Commission that such additional Registration
Statement will not be reviewed or is no longer subject to further review and
comments.
"Effectiveness Period" shall
have the meaning set forth in Section 2(a).
"Exchange Act" means the
Securities Exchange Act of 1934, as amended.
"Filing Date" means with
respect to the initial Registration Statement required to be filed to cover the
resale by the Holders of the Registrable Securities, the 45th day following the
Closing Date.
"Holder" or "Holders" means the holder or
holders, as the case may be, from time to time of Registrable
Securities.
"Indemnified Party" shall have
the meaning set forth in Section 5(c).
"Indemnifying Party" shall
have the meaning set forth in Section 5(c).
"Losses" shall have the
meaning set forth in Section 5(a).
"Proceeding" means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.
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"Prospectus" means the
prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"Registrable Securities" means
the Common Stock issued or issuable to the Investors pursuant to the Purchase
Agreement, including without limitation any and all Additional Shares and
Penalty Shares, (and any additional securities issued in connection with a stock
dividend or stock split thereof or in connection with any recapitalization,
merger, consolidation or reorganization).
"Registration Statement" means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration statement(s) required to be filed
under Section 2(b) or 2(c), including (in each case) the Prospectus, amendments
and supplements to such registration statements or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statements.
"Rule 144" means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule 415" means Rule 415
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule 424" means Rule 424
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Securities Act" means the
Securities Act of 1933, as amended.
“Trading Day” means (i) a
day on which the Common Stock is traded on a Trading Market, or (ii) if the
Common Stock is not listed on a Trading Market, a day on which the Common Stock
is traded in the over-the-counter market is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i) or (ii) hereof, then Trading Day shall mean a business
day.
“Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or the OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.
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2. Registration.
(a) On or
prior to the Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all Registrable Securities not
already covered by an existing and effective Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The
Company shall cause the Registration Statement to be declared effective under
the Securities Act as soon as possible but, in any event, no later than the
Effectiveness Date, and shall use its best efforts to keep the Registration
Statement effective under the Securities Act until such time that no Holder is
an Affiliate of the Company and has been an Affiliate for a period of at least
90 days (the "Effectiveness
Period").
(b) If for
any reason the Commission does not permit all of the Registrable Securities to
be included in the Registration Statement filed pursuant to Section 2(a), or for
any other reason any Registrable Securities are not permitted by the Commission
to be included in a Registration Statement filed under this Agreement, then the
Company shall prepare and file as soon as possible after the date on which the
Commission shall indicate as being the first date or time that such filing may
be made, an additional Registration Statement covering the resale of all
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415. Each such Registration Statement shall contain (except
if otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement) the "Plan of Distribution"
attached hereto as Annex A. The Company shall cause each such
Registration Statement to be declared effective under the Securities Act as soon
as possible but, in any event, no later than its Effectiveness Date, and shall
use its best efforts to keep such Registration Statement effective under the
Securities Act during the entire Effectiveness Period.
(c) If at any
time during the Effectiveness Period, less than 95% of the then Registrable
Securities are then registered in a Registration Statement(s), then the Company
shall file as soon as reasonably practicable, but in any case prior to the
applicable Filing Date subject to any restrictions imposed by Rule 415, an
additional Registration Statement covering the resale by the Holders of not less
than 100% of the number of then Registrable Securities.
(d) If the
Company fails to file a Registration Statement on or prior to the applicable
Filing Date, or if the Effective Date of a Registration Statement is not on or
prior to the applicable Effectiveness Date, then the Investors will be entitled
to receive the following:
(i) Each
Investor will be entitled to receive, for no additional consideration, an
additional number of shares of Common Stock equal to (A) 25,000
shares of Common Stock for each One Million Dollars ($1,000,000) in principal of
the Note held by such Investor; plus (B) if such filing or effectiveness, as the
case may be, is more than 30 days late, 5,000 shares of Common Stock for each
One Million Dollars ($1,000,000) in principal of the Note held by such Investor
and an additional 5,000 shares of Common Stock for each One Million Dollars
($1,000,000) in principal of the Note held by such Investor for each subsequent
30-day period that such filing or effectiveness, as the case may be, is
late.
(ii) An
Investor will be entitled to no such shares as set forth in Section 2(d)(i)
hereof if the delay in filing or effectiveness, as the case may be, is
attributable to any action or inaction of such Investor.
(iii) Such
additional shares of Common Stock as set forth in this Section 2(d) shall be
issuable at the time such penalty is incurred.
3. Registration
Procedures
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not less
than four Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to the Holders copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holders. The Company shall not file a Registration
Statement or any such Prospectus or any amendments or supplements thereto that
does not contain the disclosure containing such Holder as a “Selling
Stockholder” as provided to the Company by such Holder in connection
therewith.
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(b) (i) Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply with the
provisions of the Securities Act and the Exchange Act with respect to the
Registration Statements and the disposition of all Registrable Securities
covered by each Registration Statement.
(c) Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing) and (if requested
by any such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders that pertain to
the Holders as a Selling Stockholder or to the Plan of Distribution, but not
information which the Company believes would constitute material and non-public
information); and (C) with respect to each Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) Use its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of
(i) any order suspending the effectiveness of a Registration Statement, or (ii)
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e) Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto in electronic “Portable Document Format”
form and all exhibits to the extent requested by such Person (including those
previously furnished) promptly after the filing of such documents with the
Commission.
(f) Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(g) Prior to
any public offering of Registrable Securities, to register or qualify or
cooperate with the selling Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of all jurisdictions within the United States, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statements.
(h) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free, to
the extent permitted by the Purchase Agreement, of all restrictive legends, and
to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request.
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(i) Upon the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
4. Registration
Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
5. Indemnification.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, investment advisors, partners, members and employees of each
of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise to
such Loss would have been corrected. The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement.
(b) Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising solely out of
or based solely upon: any untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising solely out of or based solely upon
any omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent, but only to the extent
that, (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement (it being understood that the
Holder has approved Annex A hereto for this purpose), such Prospectus or such
form of Prospectus or in any amendment or supplement thereto or (2) in the case
of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the
use by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated
or defective and prior to the receipt by such Holder of an Advice or
an amended or supplemented Prospectus, but only if and to the extent that
following the receipt of the Advice or the amended or supplemented Prospectus
the misstatement or omission giving rise to such Loss would have been
corrected. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
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(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an "Indemnified Party"), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the "Indemnifying
Party") in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.
All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the proceeds actually received by such Holder from the
sale of the Registrable Securities subject to the Proceeding exceeds the amount
of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
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6. Miscellaneous
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Piggyback on
Registrations. Except as and to the extent specified in Schedule 6(b) hereto,
neither the Company nor any of its security holders (other than the Holders in
such capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities, and the Company
shall not after the date hereof enter into any agreement providing any such
right to any of its security holders. Except as and to the extent
specified in Schedule
6(b) hereto, the Company has not previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person which have not been fully satisfied.
(c) Compliance. Each
Holder covenants and agrees that it will comply with any prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(d) Discontinued
Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in clauses (ii) through (v) of
Section 3(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the "Advice") by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce
the provisions of this paragraph.
(e) Amendments and
Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and the Holders of
no less than seventy-five percent (75%) of the outstanding Registrable
Securities. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
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(f) Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 5:00 p.m. (New York City time) on a Trading
Day, (ii) the Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Agreement later than 5:00 p.m. (New York City time) on any
date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and
communications shall be as follows:
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If
to the Company:
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0000
Xxxxxxxxxx Xxxxxx
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Xxxxxxxx,
XX 00000
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Attention: Ram
Xxxxxxx
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And
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XX
Xxx 00000
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Xxxxxxx,
XX 00000
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Telecopier: (000)
000-0000
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Phone: (000)
000-0000
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Email:
xxx@xxxxxxxxxxxxxx.xxx and
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xxxxx@xxxxxxxxxxxxxx.xxx
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With
a copy to:
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Seyfarth
Xxxx LLP
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000
Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
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Xxxxxxxxxx,
X.X. 00000
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Attention: Xxxxxxx
X. Xxxxxxxxx
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Telecopier: (000)
000-0000
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Phone: (000)
000-0000
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If
to a Investor:
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To
the address set forth under such Investor's name on the signature pages
hereto.
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If
to any other Person who is then the registered
Holder:
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To
the address of such Holder as it appears in the stock transfer books of
the Company
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or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.
8
(g) Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder. Each Holder may assign their respective rights hereunder in
the manner and to the Persons as permitted under the Purchase
Agreement.
(h) Execution and
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(i) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Maryland, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) may be commenced non-exclusively in the state
and federal courts sitting in the City of New York, Borough of Manhattan, (the
“New York
Courts”). Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not personally subject to the
jurisdiction of any New York Court, or that such Proceeding has been commenced
in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for 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. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
(j) Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(k) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(l) Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(m) Independent Nature of
Investors' Obligations and Rights. The obligations of each
Investor hereunder is several and not joint with the obligations of any other
Investor hereunder, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor hereunder. The
decision of each Investor to acquire Registrable Securities pursuant to the
Transaction Documents has been made independently of any other
Investor. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Investor pursuant
hereto or thereto, shall be deemed to constitute the Investors as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert with respect to
such obligations or the transactions contemplated by this
Agreement. Each Investor acknowledges that no other Investor has
acted as agent for such Investor in connection with making its investment
hereunder and that no Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Investor shall be
entitled to protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose.
[REMAINDER
OF PAGE LEFT BLANK]
9
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
By:_________________________________
Name: Ram
Xxxxxxx
Title: Chief
Executive Officer and President
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTOR TO FOLLOW]
10
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
[INVESTOR]
By:
Name:
Title:
Address
for Notice:
Facsimile
No.:
Attn:
11
Annex
A
Plan of
Distribution
The selling stockholders may, from time
to time, sell any or all of their shares of common stock on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions.
These
sales may be at fixed or negotiated prices. The selling stockholders
may use any one or more of the following methods when selling
shares:
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·
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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·
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block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
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·
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
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·
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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·
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privately
negotiated transactions;
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·
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short
sales;
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·
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broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
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·
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a
combination of any such methods of sale;
and
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·
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any
other method permitted pursuant to applicable
law.
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The selling stockholders may also sell
shares under Rule 144 under the Securities Act, if available, rather than under
this prospectus.
The selling stockholders may also
engage in short sales against the box, puts and calls and other transactions in
our securities or derivatives of our securities and may sell or deliver shares
in connection with these trades.
Broker-dealers engaged by the selling
stockholders may arrange for other brokers-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the
selling stockholders (or, if any broker-dealer acts as agent for the purchaser
of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved. Any profits
on the resale of shares of common stock by a broker-dealer acting as principal
might be deemed to be underwriting discounts or commissions under the Securities
Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares if liabilities are imposed on that person under the Securities
Act.
The selling stockholders may from time
to time pledge or grant a security interest in some or all of the shares of
common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the
shares of common stock from time to time under this prospectus after we have
filed an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
The selling stockholders also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of
common stock from time to time under this prospectus after we have filed an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933 amending the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.
The selling stockholders and any
broker-dealers or agents that are involved in selling the shares of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In such event, any commissions received
by such broker-dealers or agents and any profit on the resale of the shares of
common stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
We are required to pay all fees and
expenses incident to the registration of the shares of common
stock. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
The selling stockholders have advised
us that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of their
shares of common stock, nor is there an underwriter or coordinating broker
acting in connection with a proposed sale of shares of common stock by any
selling stockholder. If we are notified by any selling stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of shares of common stock, if required, we will file a supplement to this
prospectus. If the selling stockholders use this prospectus for any
sale of the shares of common stock, they will be subject to the prospectus
delivery requirements of the Securities Act.
The anti-manipulation rules of
Regulation M under the Securities Exchange Act of 1934 may apply to sales of our
common stock and activities of the selling stockholders.
Schedule
6(b)
The
Company has entered into the following agreements granting registration rights
with respect to its securities, which agreements have not been fully
satisfied:
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1.
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Registration
Rights Agreement among the Company and each of the existing stockholders
named therein, filed as Exhibit 10.7 to the Company’s Registration
Statement on Form S-1 (SEC File No. 333-124942), as originally filed on
May 13, 2005.
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2.
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Registration
Rights Agreement among the Company and each of the investors named
therein, filed as Exhibit 10.5 to the Company Current Report on Form 8-K,
as filed on December 27, 2007.
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3.
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Letter
Agreement between the Company and Dr. Ranga Krishna, filed as Exhibit 10.8
to the Company Current Report on Form 8-K, as filed on December 27,
2007.
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4.
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Letter
Agreement between the Company and Xxxxxxxx Capital, LLC, filed as Exhibit
10.9 to the Company Current Report on Form 8-K, as filed on December 27,
2007.
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5.
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The
Company has agreed to register 10,000 shares of Common Stock issued to
RedChip Companies Inc. in consideration of investor relations services
provided pursuant to an agreement entered into in September
2008
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