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EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Registration Rights
Agreement") entered into as of July 8, 1998, by and between the purchasers set
forth on the signature pages hereof (each a "Purchaser," and collectively, the
"Purchasers") and Objective Communications, Inc., a Delaware corporation, with
offices at 00 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 (the
"Company").
W I T N E S S E T H:
WHEREAS, pursuant to Subscription Agreements, dated as of July
1, 1998 and as of the date hereof (the "Agreement"), by and between the Company
and the Purchasers, the Company has agreed to sell, and the Purchasers have
agreed to purchase $3,125,000 aggregate principal amount of 5% Convertible
Debentures due 2003 of the Company (the "Debentures") for a purchase price of
$10,000 per Debenture and with such other rights as are set forth in the form
of debenture (the "Form of Debenture");
WHEREAS, the Debentures are convertible into shares of the
Company's common stock, par value $.01 per share (the "Underlying Debenture
Shares"); and
WHEREAS, pursuant to the terms of, and in partial
consideration for, the Purchasers' purchase of the Debentures, the Company has
agreed to provide the Purchasers with certain registration rights with respect
to Underlying Debenture Shares and any shares of the Company's common stock
underlying warrants (the "Warrants") issuable to the Purchasers upon redemption
by the Company of the Debentures as described in the Form of Debenture (such
shares are referred to as the "Underlying Warrant Shares," and, together with
the "Underlying Debenture Shares," the "Shares") as set forth in this
Registration Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Agreement and this Registration Rights Agreement, the Company and the
Purchasers agree as follows:
1. Certain Definitions. As used in this Registration
Rights Agreement, the following terms shall have the following respective
meanings, and terms not otherwise defined herein shall have their respective
meanings as assigned to them in the Agreement:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Holder" shall include the applicable Purchaser and any
transferee of the Debentures, Shares or Registrable Securities which have not
been sold to the public, to whom the registration rights conferred by this
Registration Rights Agreement have been transferred in compliance with Section
12 of this Registration Rights Agreement.
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"Person" means and includes an individual, a partnership, a
joint venture, a corporation, a company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Prospectus" means the prospectus relating to the Underlying
Debenture Shares issuable upon conversion of the Debentures or the Underlying
Warrant Shares issuable upon exercise of the Warrants, as applicable, as filed
with the Commission pursuant to Rule 424(b) under the Securities Act or, if no
such filing is required, the form of final prospectus relating to the
Underlying Debenture Shares or the Underlying Warrant Shares included in the
Registration Statement, as the case may be, at the time the Registration
Statement is declared effective by the Commission, in either case, including
all material, if any, incorporated by reference therein.
The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
"Registration Expenses" shall mean all expenses to be incurred
by the Company in connection with Purchasers' exercise of their registration
rights under this Registration Rights Agreement, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the accounting fees
and expenses (excluding the compensation of regular employees of the Company,
which shall be paid in any event by the Company), excluding any brokerage,
sales or underwriting commission or compensation associated with the offer and
sale of the Registrable Securities which shall be paid by the Purchasers. With
respect to the "due diligence" examination of the Company, the Registration
Expenses shall include only fees and disbursements for one (1) designated
counsel for all the Holders of Debentures.
"Registration Statement" shall have the meaning set forth in
Section 2(a) herein.
"Registrable Securities" shall mean any Shares or other
securities issued or issuable to the Purchasers or any Holder upon the
conversion of any Debentures, or any Shares or other securities issued or
issuable to the Purchasers or any Holder upon the exercise of the Warrants.
"Regulation D" shall mean Regulation D as promulgated pursuant
to the Securities Act, and as it may be subsequently amended.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all brokerage fees, underwriting
discounts and selling commissions applicable to the offer and sale of
Registrable Securities and all fees and disbursements of counsel for Holders.
2. Registration Requirements. The Company shall use its
diligent best efforts to effect the registration of the Registrable Securities
contemplated by the Agreement (including,
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without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or
distribution of all the Registrable Securities in the manner (including manner
of sale) and in all states reasonably requested by the Holders under a
broad-based plan of distribution reasonably acceptable to the Holders. Such
best efforts by the Company shall include, without limitation, the following:
(a) The Company shall, as soon as practicable
after the date hereof but in no event later than 60 days after the
date hereof, file (i) a registration statement with the Commission
pursuant to Rule 415 under the Securities Act on Form S-3 under the
Securities Act (or in the event that the Company is ineligible to use
such form, such other form as the Company is eligible to use under the
Securities Act) covering the Registrable Securities so requested to be
registered (the "Registration Statement"); (ii) such blue sky filings
as shall have been requested by the Holders; and (iii) any required
filings with the National Association of Securities Dealers, Inc., the
Nasdaq National Market, or such other exchange or market on which the
Shares are traded. Thereafter, the Company shall use its best efforts
to have such Registration Statement and other filings declared
effective as promptly as practicable.
(b) If after 120 days from the date hereof, the
Registration Statement has not been declared effective by the
Commission, the Holders shall have, in addition to, and without
limiting, any other rights they may have at law, in equity or under
the Debentures, the Agreement or this Registration Rights Agreement
(including the right to specific performance), the right to receive,
as liquidated damages, an amount equal to 2% of the Stated Value (as
defined in the Debenture), in cash, for each 30-day period after such
120-day period that such Registration Statement is not effective
(which payment shall be pro rated for any period of less than 30
days). In addition to the foregoing, if after 180 days from the date
hereof, the Registration Statement has not been declared effective by
the Commission, then upon demand of any Holder, the Company shall
redeem all or any specified portion of the Debentures held by such
Holder at a redemption price equal to 130% of the sum of (x) the
principal amount thereof, plus (y) accrued but unpaid interest
thereon, if any, together with all other payments due under this
Section 2(b) and under the Debentures and the Agreement.
(c) If the Holders intend to distribute the
Registrable Securities covered by the Registration Statement by means
of an underwriting, the Holders shall so advise the Company. The
Holders will have the right to select the investment bankers for such
underwriting subject to such investment bankers being reasonably
satisfactory to the Company.
(d) The Company shall enter into such customary
agreements (including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other
reasonable actions in connection therewith in order to
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expedite or facilitate the disposition of such Registrable Securities.
If the Registrable Securities are being offered and sold in an
underwritten offering, the Company shall:
(i) make such representations and
warranties to the Holders and the underwriter or underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters in secondary underwritten offerings;
(ii) cause to be delivered to the sellers
of Registrable Securities and the underwriter or underwriters, if any,
opinions of counsel to the Company, dated the date of delivery of any
Registrable Securities sold pursuant to the Registration Statement
(which opinions (in form, scope and substance), shall be reasonably
satisfactory to the managing underwriter or underwriters, if any)
addressed to the Holders and each underwriter, if any, covering the
matters customarily covered in opinions requested in secondary
underwritten offerings and, in the case of an underwritten offering,
such other matters as may be reasonably requested by the Holders;
(iii) cause to be delivered, immediately
prior to the effectiveness of the Registration Statement (and, in the
case of an underwritten offering, at the time of delivery of any
Registrable Securities sold pursuant thereto), a "comfort" letter from
the Company's independent certified public accountants addressed to
the Holders and each underwriter, if any, stating that such
accountants are independent public accountants within the meaning of
the Securities Act and the applicable published rules and regulations
thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by letters
of the independent certified public accountants delivered in
connection with secondary underwritten public offerings;
(iv) if an underwriting agreement is
entered into, the same shall set forth in full the indemnification and
contribution provisions and procedures of Sections 6 and 7 with
respect to all parties to be indemnified pursuant to such sections;
and
(v) the Company shall deliver such
documents and certificates as may be reasonably requested by
the Holders of the Registrable Securities being sold or the managing
underwriter or underwriters, if any, to evidence compliance with
clause (i) above and with any customary conditions contained in the
underwriting agreement, if any, or other agreement entered into by the
Company; the foregoing in this Section 2(d) shall be done at each
closing under such underwriting or similar agreement or as and to the
extent required thereunder; provided, however, the foregoing in
Section 2(d) shall be required on only one (1) occasion.
(e) The Company shall make available for
inspection by a representative or representatives of the Holders, any
underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney or accountant retained by
such Holders or underwriter, all financial and other records customary
for such purposes, pertinent corporate documents and properties of the
Company, and cause the
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Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney
or accountant in connection with such Registration Statement. The
Holders will agree to keep all non-public information supplied to it
confidential until such information is included in the Registration
Statement filed with the Commission.
3. Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance with
registration pursuant to this Registration Rights Agreement shall be borne by
the Company, and all Selling Expenses shall be borne by the Holders.
4. Registration on Form S-3. The Company shall use its
best efforts to qualify for registration on Form S-3 or any comparable or
successor form or forms, or in the event that the Company is ineligible to use
such form, such form as the Company is eligible to use under the Securities
Act.
5. Registration Procedures. In the case of each
registration effected by the Company pursuant to this Registration Rights
Agreement, the Company will keep the Holders advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will use its best efforts to:
(a) Keep such registration effective for the
period ending at the earlier of the following: (i) thirty-six (36)
months after the later date of the date hereof or the date on which
the Warrants are issued by the Company, or (ii) the time the Holders
have completed their distribution of the Shares.
(b) Furnish such number of prospectuses, and
amendments and supplements thereto, and other documents incident
thereto as any Holder from time to time may reasonably request.
(c) Prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement
as may be necessary to keep such Registration Statement effective for
the applicable period; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with
the provisions of the Securities Act applicable to it with respect to
the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
Registration Statement or supplement to such Prospectus.
(d) Notify each Holder of Registrable Securities
included in the Registration Statement, counsel for the Holders and
the managing underwriters, if any, promptly, and (if requested by any
such Person) confirm such notice (a "Notice") in writing, (1) when a
Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (2) of
the issuance by
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the Commission of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purposes, (3) if at any time the representations and warranties of the
Company contained in agreements contemplated by Section 2(d) cease to
be true and correct, (4) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (5) of
the happening of any event as a result of which the Prospectus
included in the Registration Statement (as then in effect) contains
any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus or any preliminary Prospectus,
in light of the circumstances under which they were made) not
misleading and (6) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate or that there exist circumstances not yet disclosed to the
public which make further sales under such Registration Statement
inadvisable pending such disclosure and post-effective amendment.
(e) Upon the occurrence of any event contemplated
by Section 5(d)(2) through (6) and immediately upon the expiration of
any Blocking Period (as defined in Section 5A), prepare, if the
occurrence of such event or period requires such preparation, a
supplement or post-effective amendment to the Registration Statement
or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading.
(f) Make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement, or the lifting of any suspension of the
qualification of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
(g) Ensure that all Registrable Securities
subject to the Registration Statement shall at all times be registered
or qualified for offer and sale under the securities or blue sky laws
of such jurisdictions as any Holder or underwriter reasonably requests
in writing; use its best efforts to keep each such registration or
qualification effective, including through new filings or amendments
or renewals, during the period such Registration Statement is required
to be kept effective and 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 applicable Registration
Statement; provided, however, that the Company will not be required to
qualify to do business or take any action that would subject it to
taxation or general service of process in any jurisdiction where it is
not then so qualified or subject.
(h) Use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by the National Association
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of Securities Dealers, Inc. as may be necessary to enable the seller
or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities in
accordance with the chosen method or methods of distribution.
(i) Cause all Registrable Securities included in
such Registration Statement to be listed, by the date of first sale of
Registrable Securities pursuant to such Registration Statement, on the
principal securities exchange or automated interdealer system on which
the same type of securities of the Company are then listed or traded.
5A. Suspensions of Effectiveness. The Company may
suspend dispositions under the Registration Statement and notify the Holders
that they may not sell the Registrable Securities pursuant to any Registration
Statement or Prospectus (a "Blocking Notice") if the Company's board of
directors determines in its reasonable good faith judgment that the Company's
obligation to ensure that such Registration Statement and Prospectus are
current and complete would require the Company to take actions that might
reasonably be expected to have a materially adverse detrimental effect on the
Company and its stockholders; provided that the Company shall diligently and
expeditiously take all actions it reasonably determines to be necessary or
advisable to cause such Prospectus to be current and complete and to remove
such suspension pursuant to a Blocking Notice or the Notice described below or
as a result of the circumstances described in Section 5(d)(2) through (6)
within sixty (60) days. Each Holder agrees by acquisition of the Registrable
Securities that, upon receipt of a Blocking Notice or "Notice" from the Company
of the existence of any fact of the kind described in the following sentence,
such Holder shall not dispose of, sell or offer for sale the Registrable
Securities pursuant to the Registration Statement until such Holder receives
(i) copies of the supplemented or amended Prospectus, or until counsel for the
Company shall have determined that such disclosure is not required due to
subsequent events, (ii) notice in writing (the "Advice") from the Company that
the use of the Prospectus may be resumed and (iii) copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
Pursuant to the immediately preceding sentence, the Company may provide such
Notice to such Holder upon the determination by the Company of the existence of
any fact or the happening or any event that makes any statement of a material
fact made in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein untrue in
any material respect, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus, in order to make the
statements therein not misleading in any material respect. If so directed by
the Company in connection with any such notice, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Securities that was current immediately prior to the time of receipt of such
notice. In the event the Company shall give any such Blocking Notice or
Notice, the time regarding the effectiveness of such Registration Statement set
forth in Section 5(a) and the Maturity Date of the Debentures (as defined
therein) and the expiration date of the Warrants shall be extended by one and
one-half (1-1/2) times the number of days during the period from and including
the date of the giving of such Blocking Notice or Notice to and including the
date when the Holders shall have received the copies of the supplemented or
amended Prospectus, the Advice and any additional or supplemental filings that
are incorporated by reference in the Prospectus. Delivery of a Blocking
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Notice or Notice and the related suspension of any Registration Statement shall
not constitute a default under this Registration Rights Agreement and shall not
create any obligation to pay liquidated damages under Section 2 hereof.
However, if the Holder's ability to sell under the Registration Statement is
suspended for more than the sixty (60) day period described above (whether or
not consecutive) during any twelve (12) month period (an "Excess Blocking
Period"), then during the period of such suspension, the Company will pay each
Holder 2.0% per month on the outstanding principal amount of the Debentures
following the beginning of an Excess Blocking Period until the Excess Blocking
Period terminates. In addition, if the Excess Blocking Period continues for
more than an aggregate of 180 days in any 360-day period, then at Holder's
option, the Company shall redeem Holder's Debentures at a redemption price
equal to 130% of the sum of (x) the principal amount thereof plus (y) accrued
and unpaid interest thereon to the date of redemption, together with all
payments due under this Section and the Agreement.
6. Indemnification.
(a) Company Indemnity. The Company will indemnify each
Holder, each of its officers, directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Registration
Rights Agreement, and each underwriter, if any, and each person who controls,
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or any state securities law or in either
case, any rule or regulation thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each Holder, each
of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission (or alleged
untrue statement or omission) that is made in reliance upon and in conformity
with written information furnished to the Company by such Holder or the
underwriter for use therein. The indemnity agreement contained in this Section
6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, if Registrable
Securities held by it are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter,
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if any, of the Company's securities covered by such a registration statement,
each person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder within the meaning of Section 15 of
the Securities Act and the rules and regulations thereunder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, and will reimburse the Company and such other
Holders and their directors, officers and partners, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder for use therein; provided that no Holder shall be
liable under this indemnity for an amount in excess of the net proceeds
received by such Holder from the sale of the Registrable Securities pursuant to
such registration statement. The indemnity agreement contained in this Section
6(b) shall not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the consent of
such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification
under this Article (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim in any litigation resulting therefrom; provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at the Indemnified Party's expense; provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 6 except to the extent that the Indemnifying Party is materially and
adversely affected by such failure to provide notice. The Indemnifying Party
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such Indemnified
Party; provided, however, that if separate firm(s) of attorneys are required
due to a conflict of interest, then the Indemnifying Party shall be liable for
the reasonable fees and expenses of each such separate firm. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may
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reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.
7. Contribution. (a) If the indemnification provided
for in Section 6 herein is unavailable to the Indemnified Parties in respect of
any losses, claims, damages or liabilities referred to herein (other than by
reason of the exceptions provided therein), then each such 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, claims,
damages or liabilities (i) as between the Company on the one hand and the
Holder or underwriters, as the case may be, on the other, in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Holder or underwriters, as the case may be, on the other from
the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on
the one hand and of the Holder or underwriters, as the case may be, on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company on the one hand and the Holder
on the other, in such proportion as is appropriate to reflect the relative
fault of the Company and of the Holder in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations.
(b) The relative benefits received by the Company on the
one hand and the Holders or the underwriters, as the case may be, on the other
shall be deemed to be in the same proportion as the proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company from the initial sale of the Registrable Securities by
the Company to the Holders pursuant to this Registration Rights Agreement bear
to the net proceeds received by the Holders from the sale of Registrable
Securities pursuant to the Registration Statement or the total underwriting
discounts and commissions received by the underwriters as set forth in the
table on the cover page of the Prospectus, as the case may be. The relative
fault of the Company on the one hand and of the Holders or underwriters, as the
case may be, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company, by the Holders or by the underwriters.
(c) In no event shall the obligation of any Indemnifying
Party to contribute under this Section 7 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of indemnification
if the indemnification provided for under clauses (a) or (b) of Section 6
hereof had been available under the circumstances.
(d) The Company and the Holders agree that it would not
be just and equitable if contribution pursuant to this Section 7 were
determined by pro rated allocation (even if the Holders or the underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account the equitable considerations referred to
in the immediately preceding paragraphs. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding
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paragraphs shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Holder or underwriter
shall be required to contribute any amount in excess of the amount by which (i)
in the case of such Holder, the total price at which the shares of Common Stock
offered by such Holder and distributed to the public, or offered to the public,
exceed the amount paid by such Holder for the underlying Debentures converted
into such shares of Common Stock, (ii) in the case of an underwriter, the total
price at which the Registrable Securities purchased by it and distributed to
the public were offered to the public exceeds, in any such case, the amount of
any damages that the Holders or underwriter have otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
8. Changes in Common Stock. If, and as often as, there
is any change in the Common Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock as so
changed.
9. Rule 144 Reporting. With a view to making available
the benefits of certain rules and regulations of the Commission which may at
any time permit the sale of the Shares to the public without registration, at
all times after 90 days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have
become effective, the Company agrees to:
(a) make and keep public information available,
as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) use its best efforts to 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
(c) furnish to each Holder forthwith upon request
a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the
Company as such holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell
any Shares without registration.
10. Rule 416. The Company and the Purchasers each
acknowledge that an indeterminate number of Registrable Securities shall be
registered pursuant to Rule 416 under the Securities Act so as to include in
such Registration Statement any and all Registrable Securities which may become
issuable (i) to prevent dilution resulting from stock splits, stock dividends
or similar transactions and (ii) if permitted by law, by reason of reductions
in the Conversion Price
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(as defined in the Debenture) of the Debentures in accordance with the terms of
thereof, including, without limitation, the terms which case the Floating
Conversion Price (as defined in the Debenture) to decrease as the price of the
Common Stock decreases (collectively, the "Rule 416 Securities"). In this
regard, the Company agrees to use all reasonable efforts to ensure that the
maximum number of Registrable Securities which may be registered pursuant to
Rule 416 under the Securities Act are covered by the Registration Statement
and, absent guidance from the Commission or other definitive authority to the
contrary, the Company shall use all reasonable efforts to affirmatively support
and not to take any position adverse to the position that the Registration
Statement filed hereunder covers all of the Rule 416 Securities.
11. Survival. The indemnity and contribution agreements
contained in Sections 6 and 7 and the representations and warranties of the
Company referred to in Section 2(d)(i) shall remain operative and in full force
and effect regardless of (a) any termination of this Registration Rights
Agreement or any underwriting agreement, (b) any investigation made by or on
behalf of any Indemnified Party or by or on behalf of the Company and (c) the
consummation of the sale or successive resales of the Registrable Securities.
12. Information by Holder. Each Holder shall promptly
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Registration
Rights Agreement; provided, however, each Holder shall be given at least ten
(10) days to respond to such request. All information provided to the Company
by such Holder shall be accurate and complete in all material respects and such
Holder shall promptly notify the Company if any such information becomes
incorrect or incomplete. If such Holder does not timely provide such
information as is determined by the Company to be required by the Securities
Act to be included in the Registration Statement and is requested, the Company
may exclude the Registrable Securities of such Holder from the Registration
Statement without breach of this Registration Rights Agreement and such Holder
shall not be entitled to the liquidated damages contemplated by Section 2(b) to
the extent that such delay in the Registration Statement becoming effective is
caused by such failure to timely provide information unless such Holder shall
be able to demonstrate to the Company's satisfaction that such failure to
timely provide did not proportionately contribute to the event giving rise to
the damages obligation; provided, however, at least one (1) day's prior written
notice of the Company's intention to exclude the Registrable Securities of such
Holder from the Registration Statement shall be given to each Holder.
13. Transfer or Assignment of Registration Rights. The
rights granted to the Purchasers by the Company under this Registration Rights
Agreement to cause the Company to register Registrable Securities, may be
transferred or assigned to a transferee or assignee together with any transfer
or assignment of the Registrable Securities, provided that the Company is given
written notice by any applicable Holder at the time of or within twenty (20)
days after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which
such registration rights are being transferred or assigned, and
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provided further that the transferee or assignee of such rights agrees in
writing to be bound by this Registration Rights Agreement.
14. Representations and Warranties of the Company. The
Company represents and warrants that there are no agreements, understandings or
commitments, oral or written, between the Company and the holders of its
securities pursuant to which such holders have a right to require the Company
to register or qualify any of its securities under the Securities Act or any
applicable state securities laws, except for the rights granted to the holders
of warrants to purchase an aggregate of 341,707 shares of Common Stock issued
by the Company in private placements in 1995 and 1996 and the rights granted to
Xxxxxx X. Xxxxxx to register 946,582 shares of Common Stock.
15. Miscellaneous.
(a) Entire Agreement. This Registration Rights Agreement,
the Agreement and the Debentures contain the entire understanding and agreement
of the parties, and may not be modified or terminated except by a written
agreement signed by the parties.
(b) Notices. Any notice, demand or request required or
permitted to be given by either the Company or the Purchaser pursuant to the
terms of this Registration Rights Agreement shall be in writing and shall be
deemed given when delivered personally, by overnight courier service or by
facsimile, with a hard copy to follow by overnight or two day courier,
addressed to the other party at the address of the party set forth at the end
of this Registration Rights Agreement or such other address as a party may
request by notifying the other in writing. Copies of all notices (a) to the
Purchaser shall be sent to the address set forth on the signature pages hereof,
(b) to a Holder other than Purchaser, shall be sent to the address thereof
furnished by like notice to the Company, and (c) to the Company shall be sent
to Xxxxxx X. Xxxxx, Vice President, Finance and Administration, 00
Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, Telecopy: (603)
334-2212, with a copy to Xxxxx Xxxxx Xxxxx, Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx,
0000 Xxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx 00000, Telecopy: (000) 000-0000, or
to such other corporate officer as it may hereafter designate.
(c) Gender of Terms. All terms used herein shall be
deemed to include the feminine and the neuter, and the singular and the plural,
as the context requires.
(d) GOVERNING LAW; CONSENT OF JURISDICTION. THIS
REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW OR CHOICE OF LAW EXCEPT FOR MATTERS ARISING UNDER THE
SECURITIES ACT OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH
MATTERS SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH SUCH LAWS.
(e) Severability. Notwithstanding any provision of this
Registration Rights Agreement, neither the Company nor any other party hereto
shall be required to take any action which would be in violation of any
applicable Federal or state securities law. The invalidity or unenforceability
of any provision of this Registration Rights Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of any other
provision of this Registration Rights
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Agreement in such jurisdiction or the validity, legality or enforceability of
this Registration Rights Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
(f) Further Assurances. Each of the parties hereto shall
execute such documents and other papers and perform such further acts as may be
reasonably required or desirable to carry out the provisions of this
Registration Rights Agreement and the transactions contemplated hereby.
(g) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement which is inconsistent with the rights
granted to the Holders in this Registration Rights Agreement.
(h) Titles. The titles used in this Registration Rights
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Registration Rights Agreement.
(i) Counterparts. This Registration Rights Agreement may
be executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts and all of which
together constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed as of the date first above
written.
OBJECTIVE COMMUNICATIONS, INC.
By:
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Name:
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Address:
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Address:
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Address:
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Address:
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Address:
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