REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
This Registration Rights Agreement (this “Agreement”) is made and entered into as of September
25, 2006 and amended and restated as of August 28, 2007, by and
between Silicon Mountain Holdings, Inc. (the “Company”), and Laurus Master
Fund, Ltd. (the “Purchaser”).
This Agreement is made pursuant to the Security and Purchase Agreement, dated as of the date
hereof, by and among the Purchaser, the Company and various subsidiaries of the Company (as
amended, restated, modified or supplemented from time to time, the “Security Agreement”), and pursuant to the
Secured Convertible Term Note and Warrants referred to therein.
The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in
the Security Agreement shall have the meanings given such terms in the Security Agreement. As used
in this Agreement, the following terms shall have the following meanings:
“Commission” means the Securities and Exchange Commission.
“Common Stock” means shares of the Company’s common stock, par value $.01 per share.
“Effectiveness Date” means, (i) with respect to the Registration Statement required to be
filed in connection with the shares of Common Stock issuable upon conversion of the Secured
Convertible Term Note and exercise of the Warrants issued on the date hereof, a date no later than
one hundred eighty (180) days following the Public Transaction Closing Date and (ii) with respect
to each additional Registration Statement required to be filed hereunder (if any), a date no later
than sixty (60) days following the applicable Filing Date..
“Effectiveness Period” has the meaning set forth in Section 2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Filing Date” means, with respect to (1) with respect to the Registration Statement required
to be filed in connection with the shares of Common Stock issuable upon conversion of the Secured
Convertible Term Note and exercise of the Warrants issued on the date hereof, sixty (60) days
following the Public Transaction Closing Date (2) the Registration Statement required to be filed
in connection with the shares of Common Stock issuable to the Holder upon exercise of a Warrant
(other than the Warrant issued on the date hereof), the date which is sixty (60) days after the
issuance of such Warrant, and (3) with respect to the Registration Statement required to be filed
in connection with the shares of Common Stock issuable to the Holder as a result of adjustments to
the Fixed Conversion Price made pursuant to the Secured Convertible Term Note or to the Exercise
Price made pursuant to the Warrant, sixty (60) days after the occurrence of such event or the date
of the adjustment of the Fixed Conversion Price or Exercise Price.
“Holder” or “Holders” means the Purchaser or any of its affiliates or transferees to the
extent any of them hold Registrable Securities, other then those purchasing Registrable Securities
in a market transaction.
“Indemnified Party” has the meaning set forth in Section 5(c).
“Indemnifying Party” has the meaning set forth in Section 5(c).
“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.
“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 such 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.
“Public Transaction Closing Date” shall have the meaning provided such term in the Security
Agreement.
“Registrable Securities” means the shares of Common Stock issuable upon conversion of the
Secured Convertible Term Note and the exercise of the Warrants.
“Registration Statement” means each registration statement required to be filed hereunder,
including the Prospectus therein, amendments and supplements to such registration statement 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 statement.
“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.
“Secured Convertible Term Note” shall have the meaning set forth in the Security Agreement.
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute.
“Security Agreement” has the meaning given to such term in the Preamble hereto.
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“Trading Market” means any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market,
the NASDAQ National Market, the American Stock Exchange or the New York Stock Exchange
“Warrants” means the Common Stock purchase warrants issued in connection with the Security
Agreement, whether on the date thereof or thereafter.
2. Registration.
(a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the Registrable Securities for a selling stockholder resale
offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement shall
be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall cause each Registration Statement to become effective and
remain effective as provided herein. The Company shall use its best efforts to cause each
Registration Statement to be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event no later than the Effectiveness Date. The Company shall
use its best efforts to keep each Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable Securities covered by
such Registration Statement may be sold immediately without registration under the Securities Act
and without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (each, an “Effectiveness Period”).
(b) If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the
Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii)
after the Registration Statement is filed with and declared effective by the Commission, the
Registration Statement ceases to be effective (by suspension or otherwise) as to all Registrable
Securities to which it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional registration statement
filed and declared effective) for a period of time which shall exceed 30 days in the aggregate per
year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the
date the Registration Statement is declared effective); or (iv) the Common Stock is not listed or
quoted, or is suspended from trading on any Trading Market for a period of three (3) consecutive
Trading Days (provided the Company shall not have been able to cure such trading suspension within
30 days of the notice thereof or list the Common Stock on another Trading Market); (any such
failure or breach being referred to as an “Event,” and for purposes of clause (i) or (ii) the date
on which such Event occurs, or for purposes of clause (iii) the date which such 30 day or 20
consecutive day period (as the case may be) is exceeded, or for purposes of clause (iv) the date on
which such three (3) Trading Day period is exceeded, being referred to as “Event Date”), then until
the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 0.5% for
each thirty (30) day period (prorated for partial periods) on a daily basis of the original
principal amount of the Secured Convertible Term Note; provided that, the maximum aggregate amount
of
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liquidated damages that may be charged to the Company pursuant to this Section 2(b) shall not
exceed 10% of the initial Principal Amount of the Secured Convertible Term Note. While such Event
continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any
unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid
within three (3) days following the date on which such Event has been cured by the Company.
(c) Within three business days of the Effectiveness Date, the Company shall cause its counsel
to issue a blanket opinion to the same effect as the form attached hereto as Exhibit A, to the
transfer agent stating that the shares are subject to an effective registration statement and can
be reissued free of restrictive legend upon notice of a sale by the Purchaser and confirmation by
the Purchaser that it has complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the opinion has been
withdrawn. Copies of the blanket opinion required by this Section 2(b) shall be delivered to the
Purchaser within the time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the provisions hereof
to effect the registration of any Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received from the
Commission, and use its best efforts to cause such Registration Statement to become and remain
effective for the Effectiveness Period with respect thereto, and promptly provide to the Purchaser
copies of all filings and Commission letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all Registrable Securities
covered by such Registration Statement and to keep such Registration Statement effective until the
expiration of the Effectiveness Period applicable to such Registration Statement;
(c) furnish to the Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may
request to facilitate the public sale or disposition of the Registrable Securities covered by such
Registration Statement;
(d) use its best efforts to register or qualify the Purchaser’s Registrable Securities covered
by such Registration Statement under the securities or “blue sky” laws of such jurisdictions within
the United States as the Purchaser may reasonably request, provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) list the Registrable Securities covered by such Registration Statement with any securities
exchange on which the Common Stock of the Company is then listed;
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(f) immediately notify the Purchaser at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event of which the
Company has knowledge as a result of which the Prospectus contained in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(g) make available for inspection by the Purchaser and any attorney, accountant or other agent
retained by the Purchaser, all publicly available, non-confidential financial and other records,
pertinent corporate documents and properties of the Company, and cause the Company’s officers,
directors and employees to supply all publicly available, non-confidential information reasonably
requested by the attorney, accountant or agent of the Purchaser.
4. Registration Expenses. All expenses relating to the Company’s compliance with Sections 2
and 3 hereof, including, without limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel and independent public accountants for the Company, fees and
expenses (including reasonable counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of transfer agents and
registrars, and fees of, and disbursements incurred by, (so long as such fees and disbursements do
not exceed $7,500) one counsel for the Holders, are called “Registration Expenses”. All selling
commissions applicable to the sale of Registrable Securities, including any fees and disbursements
of any special counsel to the Holders beyond those included in Registration Expenses, are called
“Selling Expenses.” The Company shall only be responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities under the Securities Act
pursuant to this Agreement, the Company will indemnify and hold harmless each Holder, and its
officers, directors and each other person, if any, who controls such Holder within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which
such Holder, or such persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Securities were registered under the Securities
Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Holder, and each such person for any
reasonable legal or other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with
information furnished by or on behalf of the Purchaser or any such person in writing
specifically for use in any such document.
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(b) In the event of a registration of the Registrable Securities under the Securities Act
pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its
officers, directors and each other person, if any, who controls the Company within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which
the Company or such persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact which was
furnished in writing by the Purchaser to the Company expressly for use in (and such information is
contained in) the Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the Company and each
such person for any reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, provided,
however, that the Purchaser will be liable in any such case if and only to the extent that
any such loss, claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity with information
furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any
such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be
required to indemnify any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection with any such
registration under the Securities Act.
(c) Promptly after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such Indemnified Party shall, if
a claim for indemnification in respect thereof is to be made against a party hereto obligated to
indemnify such Indemnified Party (an “Indemnifying Party”), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to such Indemnified Party other than under this Section 5(c) and shall
only relieve it from any liability which it may have to such Indemnified Party under this Section
5(c) if and to the extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the Indemnifying Party of
the commencement thereof, the Indemnifying Party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such
Indemnified Party, and, after notice from the Indemnifying Party to such Indemnified Party of its
election so to assume and undertake the defense thereof, the Indemnifying Party shall not be liable
to such Indemnified Party under this Section 5(c) for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the Indemnified Party retains its
own counsel, then the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there may be reasonable
defenses available to it which are different from or additional to those available to the
Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party shall have the right
to
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select one separate counsel and to assume such legal defenses and otherwise to participate in
the defense of such action, with the reasonable expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the Indemnifying Party as
incurred.
(d) In order to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or
controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5
but it is judicially determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact that this Section 5
provides for indemnification in such case, or (ii) contribution under the Securities Act may be
required on the part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in
each such case, the Company and the Purchaser will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from others) in such
proportion so that the Purchaser is responsible only for the portion represented by the percentage
that the public offering price of its securities offered by the Registration Statement bears to the
public offering price of all securities offered by such Registration Statement, provided,
however, that, in any such case, (A) the Purchaser will not be required to contribute any
amount in excess of the public offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 10(f) of the Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
6. Representations and Warranties.
(a)
Silicon Mountain Memory, Incorporated (“SMM”) has furnished
the Purchaser with copies of: SMM’s and its
Subsidiaries’ (x) consolidated audited balance sheet, statement of retained earnings, statement of
operations and statement of cash flows for its fiscal years ended December 31, 2004 and December
31, 2005 and (y) consolidated unaudited balance sheet, statement of retained earnings, statement of
operations and statement of cash flows for its fiscal quarters ended March 31, 2006 and June 30,
2006 (the forgoing clause (x) and (y), collectively, the “Financial Statements”). Such Financial
Statements have been prepared in accordance with generally accepted accounting principles as in
effect in the United States, in each case, applied on a consistent basis during the periods
involved (except as may be otherwise indicated in such financial statements or the notes thereto).
No Financial Statement contained any untrue statement of a material fact or omitted 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. The Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis during the periods involved
(except as may be otherwise indicated in such financial statements or the notes thereto) and fairly
present in all material respects the financial condition, the results of operations and cash flows
of the SMM and its Subsidiaries, on a consolidated basis, as of, and for, the periods presented
in each such Financial Statement.
(b) The Company shall ensure that the Common Stock is listed or quoted, as the case may be,
for trading on a Principal Market by no later than the date that is the sixth month
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anniversary of
the Public Transaction Closing Date. Following such listing or quotation, the Company shall do all
things necessary for the continuation of such listing or quotation.
(c) Neither the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or solicited any offers
to buy any security under circumstances that would cause the offering of the Securities pursuant
to the Security Agreement to be integrated with prior offerings by the Company for purposes of the
Securities Act which would prevent the Company from selling the Common Stock pursuant to Rule 506
under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor
will the Company or any of its affiliates or subsidiaries take any action or steps that would cause
the offering of the Common Stock to be integrated with other offerings (other than such concurrent
offering to the Purchaser) and which would prevent the Company from selling the Common Stock
pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder
approval provisions.
(d) The Secured Convertible Term Note, the Warrants and the shares of Common Stock that the
Purchaser may acquire pursuant to the Secured Convertible Term Note and the Warrants are all
restricted securities under the Securities Act as of the date of this Agreement. The Company will
not issue any stop transfer order or other order impeding the sale and delivery of any of the
Registrable Securities at such time as such Registrable Securities are registered for public sale
or an exemption from registration is available, except as required by federal or state securities
laws.
(e) The Company understands the nature of the Registrable Securities issuable upon the
conversion of the Secured Convertible Term Note and the exercise of each Warrant and recognizes
that the issuance of such Registrable Securities may have a potential dilutive effect. The Company
specifically acknowledges that its obligation to issue the Registrable Securities is binding upon
the Company and enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
(f) Except for agreements made in the ordinary course of business, there is no agreement that
has not been filed with the Commission as an exhibit to a registration statement or to a form
required to be filed by the Company under the Exchange Act, the breach of which could reasonably be
expected to have a material and adverse effect on the Company and its subsidiaries, or would
prohibit or otherwise interfere with the ability of the Company to enter into and perform any of
its obligations under this Agreement in any material respect.
(g) The Company will at all times have authorized and reserved a sufficient number of shares
of Common Stock for the full conversion of the Secured Convertible Term Note and the full exercise
of the Warrants.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
respective 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,
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including recovery of damages, will be entitled to specific performance of its rights
under this Agreement.
(b) No Piggyback on Registrations. Except as and to the extent set forth on Schedule 7(b)
hereto, or with the consent of Purchaser, 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
any Registration Statement other than the Registrable Securities, and the Company shall not after
the date hereof enter into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the extent specified in
Schedule 7(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 that have not been
fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to any 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 a Discontinuation
Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable 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. For purposes of
this Agreement, a “Discontinuation Event” shall mean (i) 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); (ii) any request by the
Commission or any other Federal or state governmental authority for amendments or supplements to
such Registration Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration Statement covering
any or all of the Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) 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/or (v) the
occurrence of any event or passage of time that makes the financial statements included in such
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
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
Registration Rights Agreement
9
make the statements therein, in light of the circumstances under which they were made, not
misleading.
(e) Piggy-Back Registrations. If at any time after the date hererof there is not an effective
Registration Statement covering all of the Registrable Securities required to be covered hereunder
and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of
any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company shall send to each
Holder written notice of such determination and, if within fifteen (15) days after receipt of such
notice, any such Holder shall so request in writing, the Company shall include in such registration
statement all or any part of such Registrable Securities that are not otherwise covered by a
registration statement and that such Holder requests to be registered, to the extent the Company
may do so without violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders of registration
rights and subject to obtaining any required consent of any selling stockholder(s) to such
inclusion under such registration statement.
(f) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in writing and signed by the
Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of certain Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to the Company or the Purchaser at
the respective addresses set forth below or as may hereafter be specified in a notice designated as
a change of address under this Section 7(g). Any notice or request hereunder shall be given by
registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal
Express or other national overnight next day carrier (collectively, “Courier”) or telecopy
(confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed
to have been given when delivered to any party to whom it is addressed, in the case of those by
mail or overnight mail, deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in the case of a
telecopy, when confirmed. The address for such notices and communications shall be as follows:
If to the Company, to:
|
Silicon Mountain Memory, Incorporated | |
| 0000 Xxxxxx Xxxxxx |
Registration Rights Agreement
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| Xxxxxxx, Xxxxxxxx 00000 | ||
| Attention: | ||
| Xxxxxxx (Tré) X. Xxxxx III Fax: (000) 000-0000 |
||
With a copy to:
|
Xxxxxx Xxxxx LLP | |
| 0000 Xxxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxx, Xxxxxxxx 00000 | ||
| Attention: Xxxx Xxxxxxxxx, Esq. | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
If to a Purchaser:
|
To the address set forth under such Purchaser name on the signature pages hereto. | |
If to any other Person who is
then the registered Holder:
|
To the address of such Holder as it appears in the stock transfer books of the Company |
or such other address as may be designated in writing hereafter in accordance with this Section
7(g) by such Person.
(h) 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 Security Agreement.
(i) 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.
(j) Governing Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The
Company hereby consents and agrees that the state or federal courts located in the County of New
York, State of New York shall have exclusion jurisdiction to hear and determine any Proceeding
between the Company, on the one hand, and the Purchaser, on the other hand, pertaining to this
Agreement or to any matter arising out of or related to this Agreement; provided, that the
Purchaser and the Company acknowledge that any appeals from those courts may have to be heard by a
court located outside of the County of New York, State of New York, and further
provided, that nothing in this Agreement shall be
Registration Rights Agreement
11
deemed or operate to preclude the Purchaser from bringing a Proceeding in any other
jurisdiction to collect the obligations, to realize on the Collateral or any other security for the
obligations, or to enforce a judgment or other court order in favor of the Purchaser. The Company
expressly submits and consents in advance to such jurisdiction in any Proceeding commenced in any
such court, and the Company hereby waives any objection which it may have based upon lack of
personal jurisdiction, improper venue or forum non conveniens. The Company hereby waives
personal service of the summons, complaint and other process issued in any such Proceeding and
agrees that service of such summons, complaint and other process may be made by registered or
certified mail addressed to the Company at the address set forth in Section 7(g) and that service
so made shall be deemed completed upon the earlier of the Company’s actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid. The parties hereto desire that
their disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the
best combination of the benefits of the judicial system and of arbitration, the parties hereto
waive all rights to trial by jury in any Proceeding brought to resolve any dispute, whether arising
in contract, tort, or otherwise between the Purchaser and/or the Company arising out of, connected
with, related or incidental to the relationship established between then in connection with this
Agreement. If either party hereto shall commence a Proceeding to enforce any provisions of this
Agreement, the Security Agreement or any other Ancillary Agreement, then the prevailing party in
such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
(l) 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.
(m) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank; signature page follows]
Registration Rights Agreement
12
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.
| SILICON MOUNTAIN MEMORY, INCORPORATED |
||||
| By: | /s/ Xxxxxxx (Tré) X. Xxxxx III | |||
| Xxxxxxx (Tré) X. Xxxxx III | ||||
| President and Chief Executive Officer | ||||
| LAURUS MASTER FUND, LTD. |
||||
| By: | /s/ Xxxxx Grin | |||
| Name: | Xxxxx Grin | |||
| Title: | Director | |||
| Address for Notices:
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx Grin Facsimile: 000-000-0000 |
||||
Registration Rights Agreement
13
EXHIBIT A
, 200
[Continental Stock Transfer
& Trust Company
Two Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx]
& Trust Company
Two Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx]
| Re: Silicon Mountain Holdings, Inc. Registration Statement on Form [S-3] |
Ladies and Gentlemen:
As
counsel to Silicon Mountain Holdings, Inc., a Colorado corporation (the “Company”),
we have been requested to render our opinion to you in connection with the resale by the
individuals or entitles listed on Schedule A attached hereto (the “Selling Stockholders”),
of an aggregate of shares (the “Shares”) of the Company’s Common Stock.
A Registration Statement on Form [S-3] under the Securities Act of 1933, as amended (the
“Act”), with respect to the resale of the Shares was declared effective by the Securities and
Exchange Commission on [date]. Enclosed is the Prospectus dated [date]. We understand that the
Shares are to be offered and sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any time while the
registration statement remains effective, it is our opinion that the Shares have been registered
for resale under the Act and new certificates evidencing the Shares upon their transfer or
re-registration by the Selling Stockholders may be issued without restrictive legend. We will
advise you if the registration statement is not available or effective at any point in the future.
| Very truly yours, [Company counsel] |
||||
Registration Rights Agreement
Schedule A to Exhibit A
| Shares | |||||
| Selling Stockholder | R/N/O | Being Offered | |||
Registration Rights Agreement
SCHEDULE 7(b)
None.
Registration Rights Agreement
