EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 17, 2000 (this
"Agreement"), is made by and between 5B TECHNOLOGIES CORPORATION, a Delaware
corporation (the "Company"), and LA VISTA INVESTORS LLC, a Delaware limited
liability company (the "Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of the date
hereof among the Purchaser and the Company (the "Securities Purchase
Agreement"), the Company has agreed to issue and sell to the Purchaser (i) one
thousand (1,000) shares (the "Preferred Shares") of the Company's 6% Convertible
Series A Preferred Stock, stated value $1,000 per share, and (ii) a warrant (the
"Warrants") to purchase one hundred thousand (100,000) shares of the common
stock, par value $0.04 per share, of the Company (the "Common Stock").
WHEREAS, pursuant to the terms of the Preferred Shares and the Warrants,
(i) upon the conversion of the Preferred Shares, (ii) in lieu of dividend
payments on the Preferred Shares, and (iii) upon exercise of the Warrants, the
Company will issue to the Purchaser shares of Common Stock (such shares are
referred to herein as the "Shares"); and
WHEREAS, to induce the Purchaser to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended (the "Securities 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 as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Filing Deadline" shall have the meaning set forth in Section
2(a)(i) hereof.
(ii) "Initial Registration Statement" means a registration
statement or registration statements of the Company filed under the Securities
Act covering Registrable Securities.
(iii) "Purchase Price" means the aggregate purchase price paid by
the Purchaser for the Shares the Warrants.
(iv) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a registration statement or
statements in compliance with the
Securities Act and pursuant to Rule 415 under the Securities 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 by the United States Securities and Exchange Commission (the
"Commission").
(v) "Registrable Securities" means the Shares..
(vi) "Registration Statement" means a registration statement of
the Company under the Securities Act.
(vii) "Required Effective Date" shall have the meaning set forth
in section 2(a)(i) hereof.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings set-forth in the Securities Purchase Agreement.
2. REGISTRATION.
A. MANDATORY REGISTRATIONS.
(i) INITIAL REGISTRATION STATEMENT. The Company shall prepare, and, as soon as
practicable but in no event later than thirty (30) days after the Closing Date
(as defined in the Securities Purchase Agreement) (the "Filing Deadline"), file
with the Commission an Initial Registration Statement or Initial Registration
Statements (as necessary) on Form S-3, covering the resale of all of the
Registrable Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration. Any Initial Registration Statement prepared pursuant hereto shall
register for resale at least that number of shares of Common Stock equal to the
product of (x) two and, (y) the sum of (i) the maximum number of Shares that are
issuable upon conversion of the Preferred Shares and the Warrants on the date of
filing, and (ii) the maximum number of Shares issuable upon exercise of the
Warrants, in each case, without regard to any limitation on any holder's ability
to convert any of the Warrants or the Preferred Shares and without regard to
whether any or all of such Preferred Shares or Warrants have been issued to
Purchaser (on the date calculated, the "Minimum Conversion Amount"). If
permitted by the rules of the Securities and Exchange Commission, such
Registration Statement shall state that, in accordance with Rule 416 under the
Securities Act, it also covers such indeterminate number of additional Shares as
may become issuable upon conversion of such Preferred Shares or exercise of such
Warrants (i) resulting from any adjustment in the applicable Conversion Price of
such Preferred Shares or the Exercise Price of such Warrants, or (ii) to prevent
dilution resulting from stock splits or stock dividends. If at any time the
Minimum Conversion Amount exceeds the total number of Shares so registered, the
Company shall, within five (5) business days after receipt of a written notice
from the Purchaser, either (i) amend the Registration Statement or Registration
Statements filed by the Company pursuant to the preceding sentence, if such
Registration Statement has not been declared effective by the Commission at that
time, to register all of the Shares into which the Preferred Shares and the
Warrants may be converted or exercised, as applicable, or (ii) if such
Registration Statement has been declared effective by the Commission at that
time, file with the Commission an additional Registration Statement on Form S-3,
or such other appropriate form, to register the
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number of shares of Common Stock into which the Preferred Shares and Warrants
may be converted or exercised, as applicable, that exceed the number of Shares
already registered. The Company shall use its best efforts to have the Initial
Registration Statement declared effective within the earliest to occur of (i)
ninety (90) days following the Closing Date, or (ii) if the Commission elects
not to conduct a review of the Initial Registration Statement, the date which is
three (3) business days after the date upon which either the Company or its
counsel is so notified, whether orally or in writing. The earliest of such dates
is referred to herein as the "Required Effective Date." Notwithstanding the use
of the terms "Filing Deadline" and "Required Effective Date" herein, the Company
shall at all times use its best efforts to file each required Registration
Statement or amendment to a Registration Statement as soon as possible after the
Closing Date or after the date the Company becomes obligated to file such
Registration Statement or amendment, as the case may be, and to cause each such
Registration Statement or amendment to become effective as soon as possible
thereafter. No securities of the Company other than the Registrable Securities
shall be included in any such Registration Statement.
(ii) The Company shall keep each Registration Statement effective
pursuant to Rule 415 at all times until such date as is the earlier of (i) the
date on which all of the Registrable Securities have been sold, (ii) the date on
which the Registrable Securities (in the reasonable opinion of counsel to the
Purchaser) may be immediately sold without restriction (including without
limitation as to volume by each holder thereof) without registration under the
Securities Act and (iii) the date which is twenty four (24) months following the
date on which the Registration Statement was declared effective (the
"Registration Period").
(B) PAYMENTS BY THE COMPANY.
(i) (A) If the Registration Statement covering the Registrable
Securities is not filed in proper form with the Commission on or prior to the
Filing Deadline, (B) if the Registration Statement covering the Registrable
Securities is not effective on or prior to the Required Effective Date, or (C)
if the number of Shares listed for trading or the NASDAQ SmallCap Stock Market,
as applicable, or reserved by the Company for issuance shall be insufficient,
for any period of seven (7) consecutive days at any time after the Required
Effective Date, for issuance upon the conversion of the Preferred Shares and the
exercise of the Warrants, or (D) upon the occurrence of a Blackout Event (as
described in Section 3(f) or Section 3(g) below), for any period of five (5)
consecutive days at any time after the Required Effective Date (each of the
events described in clauses (A) through (D) of this paragraph are referred to
herein as a "Registration Default"), the Company will make payments to the
Purchaser in such amounts and at such times as shall be determined pursuant to
this Section 2(b).
(ii) The amount (the "Periodic Amount") to be paid by the Company to
the Purchaser as of each thirty (30) day period during which a Registration
Default shall be in effect (each such period, a "Default Period") shall be equal
to two percent (2%) of the Purchase Price; PROVIDED that, with respect to any
Default Period during which the relevant Registration Defaults shall have been
cured, the Periodic Amount shall be PRO RATED for the number of days during such
period during which the Registration Defaults were pending; and PROVIDED,
however, that the payment of such Periodic Amounts shall not relieve the Company
from its continuing obligations to register the Warrants and Shares pursuant to
Section 2(a).
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(iii) Each Periodic Amount shall be payable by the Company in cash or
other immediately available funds to the Purchaser monthly, without demand
therefor by the Purchaser.
(iv) The parties acknowledge that the damages which may be incurred by
the Purchaser if the Registration Statement is not filed by the Filing Deadline,
if the Registration Statement has not been declared effective by the Required
Effective Date, or if the provisions of Section 3(e) become applicable, may be
difficult to ascertain. The parties agree that the Periodic Amount represents a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages.
(C) PIGGYBACK REGISTRATION. (i) If at any time or from time to time, the
Company shall determine to register any of its securities, for its own account
or the account of any of its stockholders, other than a Registration relating
solely to employee share option plans or pursuant to an acquisition transaction
on Form S-4, the Company will:
(A) provide to the Purchaser written notice thereof as soon as
practicable prior to filing the Registration Statement; and
(B) include in such Registration Statement and in any underwriting
involved therein, all of the Registrable Securities (not already included in an
effective registration statement) specified in a written request by the
Purchaser made within fifteen (15) days after receipt of such written notice
from the Company.
(ii) If the Registration is for a registered public offering involving an
underwriting, the Company shall so advise the Purchaser as a part of the written
notice given pursuant to this Section. In such event, the rights of the
Purchaser hereunder shall include participation in such underwriting and the
inclusion of the Registrable Securities in the underwriting to the extent
provided herein. To the extent that the Purchaser proposes to distribute its
securities through such underwriting, the Purchaser shall (together with the
Company and any other security holders of the Company distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section, if the managing underwriter of such underwriting determines that
marketing factors require a limitation of the number of shares to be offered in
connection with such underwriting, the managing underwriter may limit the number
of Registrable Securities to be included in the Registration and underwriting
(PROVIDED, HOWEVER, (a) the Registrable Securities shall not be excluded from
such underwritten offering prior to any securities held by officers and
directors of the Company or their affiliates, (b) the Registrable Securities
shall be entitled to at least the same priority in an underwritten offering as
any of the Company's existing security holders, and (c) the Company shall not
enter into any agreement that would provide any security holder with priority in
connection with an underwritten offering greater than the priority granted to
the Purchaser hereunder). The Company shall so advise any of its other security
holders who are distributing their securities through such underwriting pursuant
to their respective piggyback registration rights, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among the Purchaser and all
other security holders of the Company in proportion, as nearly as practicable,
to the respective
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amounts of Registrable Securities held by the Purchaser and such other security
holders at the time of the filing of the registration statement. If the
Purchaser disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company. Any Registrable Securities
so excluded or withdrawn from such underwriting shall be withdrawn from such
Registration.
(D) ELIGIBILITY FOR FORM S-3. The Company represents and warrants that
it meets all of the registrant requirements for the use of Form S-3 and the
Company shall file all reports required to be filed by the Company with the
Commission in a timely manner, and shall take such other actions as may be
necessary to maintain such eligibility for the use of Form S-3.
(E) PRIORITY IN FILING. From the date hereof until one hundred eighty
(180) days following the effective date of the Initial Registration Statement
pursuant to Section 2(a) of this Agreement, the Company shall not permit the
registration of any of its securities under the Securities Act to become
effective, other than those covered by this Agreement, without the prior written
approval of the Purchaser. The foregoing notwithstanding, the Company may permit
a registration statement to be filed or to become effective during the foregoing
period provided that (i) such registration statement relates to a bona fide,
firm commitment, underwritten public offering of the Company's securities that
provides the Company with at least seven million dollars ($7,000,000) (it being
acknowledged and agreed that equity line transactions, including, without
limitation, ongoing warrant financing or any similar arrangements, shall not
constitute a bona fide, firm commitment, underwritten public offering for
purposes hereof), (ii) a Registration Statement on Form S-8 with respect to
employee options (provided that such registration statement is for less than
512,500 shares of Common Stock), (iii) a Registration Statement on Form S-1 with
respect to the public warrants identified on Schedule 3(b) attached to the
Securities Purchase Agreement (provided that such registration statement is for
less than 1,562,500 shares of Common Stock) or (iv) a Registration Statement on
Form S-3 with respect to a sale by selling shareholders of shares of Common
Stock (provided that such registration statement is for less than 306,000 shares
of Common Stock).
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:
(a) Prepare and file with the Commission the Registration Statements
required by Section 2 of this Agreement and such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectuses used in connection with the Registration Statement, each in such
form as to which the Purchaser and its counsel shall not have reasonably
objected, as may be necessary to keep the Registration effective at all times
during the Registration Period, and, during the Registration Period, comply with
the provisions of the Securities Act until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;
(b) Furnish to the Purchaser and its legal counsel identified to the
Company, promptly after the same is prepared and publicly distributed, filed
with the Commission, or received by the Company, a copy of the Registration
Statement, each preliminary prospectus, each final prospectus and all amendments
and supplements thereto and such other documents, as
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the Purchaser may reasonably request in order to facilitate the disposition of
its Registrable Securities and Warrants;
(c) Furnish to the Purchaser and its counsel copies of any
correspondence between the Company and the Commission with respect to any
registration statement or amendment or supplement thereto filed pursuant to this
Agreement;
(d) Use all commercially reasonable efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or blue sky laws of such jurisdictions as the Purchaser
may reasonably request, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof at all times during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period and (iv)
take all other actions necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions, PROVIDED, that in connection
therewith, the Company shall not be required to qualify as a foreign corporation
or to file a general consent to the service of process in any jurisdiction;
(e) List such securities on the NASDAQ SmallCap Stock Market and all
the other national securities exchanges on which any securities of the Company
are then listed, and file any filings required by the NASDAQ SmallCap Stock
Market and/or such other exchanges;
(f) As promptly as practicable after becoming aware of such event,
notify each Purchaser of the occurrence of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and to use its best efforts to promptly prepare a
supplement or amendment to the Registration Statement or other appropriate
filing with the Commission to correct such untrue statement of omission, and to
deliver a number of copies of such supplement or amendment to the Purchaser as
the Purchaser may reasonably request;
(g) As promptly as practicable after becoming aware of such event,
notify the Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the underwriters) of the issuance by the
Commission or any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time, and to use its best
efforts to promptly obtain the withdrawal of such stop order or other suspension
of effectiveness;
(h) As promptly as practicable after becoming aware of such event,
notify the Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time, and to use its best
efforts to promptly obtain the withdrawal of such stop order or other suspension
of effectiveness (the occurrence of any of the events described in paragraphs
(f) and (g) of this Section 3 is referred to herein as a "Blackout Event");
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(i) During the period commencing upon (i) the Purchaser's receipt of a
notification pursuant to Section 3(f) above, or (ii) the entry of a stop order
or other suspension of effectiveness of the Registration Statement described in
Section 3(g) above, and ending at such time as (y) the Company shall have
completed the applicable filings (and if applicable, such filings shall have
been declared effective) and shall have delivered to the Purchaser the documents
required pursuant to Section 3(f) above, or (z), such stop order or other
suspension of the effectiveness of the Registration Statement shall have been
removed, the Company shall be liable to remit the payments required to be paid
pursuant to Section 2(b) above;
(j) If the offering is underwritten, at the request of a Purchaser, to
furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration: (i) an opinion dated such
date of counsel representing the Company for the purposes of such registration,
addressed to the underwriters and to any Purchaser selling Registrable
Securities in connection with such underwriting, stating that such registration
statement has become effective under the Securities Act and that (A) to the best
knowledge of such counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, and (B) the registration
statement, the related prospectus and each amendment or supplement thereof
comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or other financial data contained therein) and (ii) a
letter dated such date from the Company's independent public accountants
addressed to the underwriters and to the Purchaser, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereof, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including information as
to the period ending no more than five (5) business days prior to the date of
such letter) with respect to such registration as such underwriters may
reasonably request; and
(k) Cooperate with the Purchaser to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and to enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case may
be, as the Purchaser may reasonably request, and registered in such names as the
Purchaser may request; and, within three (3) business days after a Registration
Statement which includes Registrable Securities is ordered effective by the
Commission, the Company shall deliver, and shall cause legal counsel selected by
the Company to deliver, to the transfer agent for the Registrable Securities
(with copies to the Purchaser) an appropriate instruction and opinion of such
counsel.
4. OBLIGATIONS OF THE PURCHASER. In connection with the registration of the
Registrable Securities, the Purchaser shall have the following obligations;
(a) Take all other reasonable actions necessary to expedite and
facilitate the disposition by the Purchaser of the Warrants and the Registrable
Securities pursuant to the Registration Statement;
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(b) Furnish to the Company such information regarding itself, the
Warrants and Registrable Securities held by it, and the intended method of
disposition of the Warrants and the Registrable Securities held by it, as shall
be reasonably required to effect the registration of such Warrants and such
Registrable Securities, and the Purchaser shall execute such documents in
connection with such registration as the Company may reasonably request. At
least five (5) days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify the Purchaser of the
information the Company included in the Registration Statement;
(c) The Purchaser, by its acceptance of the Warrants or Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder; and
(d) The Purchaser agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(h) above, it will immediately discontinue disposition of its Warrants or
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(h) shall be furnished to the
Purchaser.
5. EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions and other fees and expenses of investment bankers and
other than brokerage commissions, incurred in connection with registrations,
filings or qualifications pursuant to Section 3, but including, without
limitation, all registration, listing and qualification fees, printing and
accounting fees, and the fees and disbursements of counsel for the Company, and
the fees of one counsel to the Purchaser with respect to each Registration
Statement filed pursuant hereto, shall be borne by the Company.
6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:
(a) The Company will indemnify and hold harmless the Purchaser, each
of its officers, directors, shareholders and members, and each person, if any,
who controls the Purchaser within the meaning of the Securities Act or the
Exchange Act of 1934, as amended (the "Exchange Act"), (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, 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 contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the Commission) or the omission to state
therein any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, or (iii) any violation or alleged
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violation by the Company of the Securities Act, the Exchange Act, any state or
foreign securities law or any rule or regulation under the Securities Act, the
Exchange Act or any state or foreign securities law (the matters in foregoing
clauses (i) through (iii) being, collectively, "Violations"). The Company shall,
subject to the provisions of Section 6(b) below, reimburse the Purchaser,
promptly as such expenses are incurred and are due and payable, for any legal
and other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise, including without limitation,
the costs, expenses and disbursements, as and when incurred, of investigating,
preparing or defending any such action, suit, proceeding or investigation
(whether or not in connection with litigation in which the Purchaser is a
party), incurred by it in connection with the investigation or defense of any
such Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (i) apply to
any Claim arising out of or based upon a modification which occurs in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) with respect to any preliminary prospectus, inure to
the benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the final prospectus, as then amended or supplemented, if such final
prospectus was timely made available by the Company pursuant to Section 3(b)
hereof; (iii) be available to the extent that such Claim is based upon a failure
of the Purchaser to deliver or to cause to be delivered the prospectus made
available by the Company, if such prospectus was timely made available by the
Company pursuant to Section 3(b) hereof; or (iv) 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. 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 Registrable Securities by the Purchaser pursuant to Section 9. The Purchaser
will indemnify the Company and its officers and directors against any Claims
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 or on behalf
of the Purchaser, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company in this Section 6.
(b) Promptly after receipt by an Indemnified Person under this Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Person 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 of the commencement thereof, and the indemnifying party
shall have the right to participate in, and to the extent that the indemnifying
party so desires, jointly with any other indemnifying party similarly notified,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person, PROVIDED, HOWEVER, that an
Indemnified Person shall have the right to retain its own counsel with the
reasonable fees and expenses 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 and the indemnifying
party would be inappropriate due to actual or potential differing interests
between
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such Indemnified Person and any other party represented by such counsel
in such proceeding. In such event, the Company shall pay for only one separate
legal counsel for the Purchaser, and such legal counsel shall be selected by the
Purchaser. The failure to deliver written notice to an indemnifying party within
a reasonable time after the commencement of any such action shall not relieve
such indemnifying party of any liability to the Indemnified Person under this
Section 6, except to the extent that the indemnifying party is materially
prejudiced in its ability to such action. 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 such expense, loss, damage or
liability is incurred and is due and payable.
(c) No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Person of an unconditional and irrevocable release from all
liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that any provisions
relating to indemnification or contribution contained in the underwriting
agreements entered into among the Company, the underwriters and the Purchaser in
connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in such underwriting agreements shall be
controlling as to the Registrable Securities included in the public offering;
PROVIDED, HOWEVER, that if, as a result of this Section 6(d), the Purchaser, its
officers, directors, shareholders, members or any person controlling the
Purchaser is or are held liable with respect to any Claim for which they would
be entitled to indemnification hereunder but for this Section 6(d) in an amount
which exceeds the aggregate proceeds received by the Purchaser from the sale of
Registrable Securities included in a registration pursuant to such underwriting
agreement (the "Excess Liability"), the Company shall reimburse the Purchaser
for such Excess Liability.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is prohibited or limited under applicable law, the indemnifying party agrees to
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the Indemnified Person on the other hand in connection with the
statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the Indemnified Person shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to state
a material fact on which such Claim is based relates to information supplied by
the indemnifying party or by the Indemnified Person, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the forgoing, (a) no contribution
shall be made under circumstances where the payor would not have been liable for
indemnification under the fault standards set forth in Section 6, (b) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities. The Company and the
Purchaser agree that it would not be just and equitable if contribution
10
pursuant to this Section 7 were determined by PRO-RATA allocation (even if the
Purchaser and any other party were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in this Section.
8. REPORTS UNDER EXCHANGE ACT.
With a view to making available to the Purchaser the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Purchaser to sell securities
of the Company to the public without registration ("Rule 144"), the Company
agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(iii) furnish to the Purchaser so long as the Purchaser owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of the Securities
Act and the Exchange Act, (ii) a copy of the most recent annual or periodic
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Purchaser to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Warrants or Registrable Securities pursuant to this Agreement shall be
automatically assigned by Purchaser to any transferee of all or any portion of
the Preferred Shares, Warrants or the underlying Common Stock held by Purchaser
if: (a) Purchaser agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such transferee or assignee, and (ii) the Securities with
respect to which such registration rights are being transferred or assigned; (c)
at or before the time the Company receives the written notice contemplated by
clause (b) of this sentence, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein; and (d) the
transfer of the relevant Securities complies with the restrictions set forth in
Section 4 of the Securities Purchase Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision 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 and the Purchaser. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon Purchaser and
the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Warrants or
Registrable Securities whenever such person or entity owns of record such
Warrants or Registrable
11
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same Warrants
or Registrable Securities, the Company shall act upon the basis of the
instructions, notice or election received from the registered owner of such
Warrants or Registrable Securities.
(b) Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free transmission
and mailing a copy of such confirmation postage prepaid by certified mail,
return receipt requested) or two business days following deposit of such notice
with an internationally recognized courier service, with postage prepaid and
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by ten (10) days
advance written notice to each of the other parties hereto.
COMPANY: 5B Technologies Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
PURCHASER: La Vista Investors LLC
WEC Asset Management LLC
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxx-xx-Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
12
WITH A COPY TO:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(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, except for provisions with respect to
internal corporate matters of the Company which shall be governed by the
corporate laws of the State of Delaware. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON CONVENIENS, to the bringing of any such
proceeding in such jurisdictions. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such validity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. Subject to the provisions of Section 10 hereof, this
Agreement may be amended only by an instrument in writing signed by the party to
be charged with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
(e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. This Agreement supersedes all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this Agreement
shall inure for the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The Company acknowledges that any failure by the Company to
perform its obligations under Section 2(a), or any delay in such performance
could result in direct damages to the Purchaser, and the Company agrees that, in
addition to any other liability the Company may have by reason of any such
failure or delay, the Company shall be liable for all
13
direct damages caused by any such failure or delay. Nothing herein shall limit
the Purchaser's right to pursue any claim seeking such direct damages.
[REMAINDER OF PAGE INTENTIONALLY BLANK, SIGNATURE PAGE FOLLOWS]
14
IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned.
COMPANY:
5B TECHNOLOGIES CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
PURCHASER:
LA VISTA INVESTORS LLC
By: WEC ASSET MANAGEMENT LLC, Manager
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
