REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement is made and entered into as
of February 23, 2001 (this "Agreement"), by and among Starbase Corporation, a
Delaware corporation (the "Company"), and each of the shareholders of the
Company listed on Schedule 1 attached hereto (individually, a "Shareholder" and,
collectively, the "Shareholders").
Upon the terms and subject to the conditions of the Agreement
and Plan of Merger (the "Merger Agreement"), dated as of February 16, 2001, by
and among the Company, TBI Acquisition Corp., a Georgia corporation, Technology
Builders, Inc., a Georgia corporation ("TBI") and Xxxxxxxx Xxxxxxxxxx, the
Company has agreed to provide to the Shareholders certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, with respect to an aggregate of 10,505,280 shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock"), issued to
the Shareholders on the date hereof pursuant to the Merger Agreement. The number
of Shares owned by each Shareholder is set forth opposite such Shareholder's
name on Schedule 1.
The Company and the Shareholders hereby agree as follows:
1. Definitions.
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Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Merger Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(l).
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms of "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section
3(m).
"Board" shall have the meaning set forth in Section 3(m).
"Business Day" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York generally are authorized or required by law or other
government actions to close.
"Closing Date" means February 23, 2001.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value
$.01 per share.
"Effectiveness Period" shall have the meaning set forth in
Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means the date the Registration Statement is
filed which date shall be on or before 120 days after the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities, including the Shareholders
and their permitted assigns and transferees.
"Indemnified Party" shall have the meaning set forth in
Section 6(c).
"Indemnifying Party" shall have the meaning set forth in
Section 6(c).
"Lock-up" shall have the meaning set forth in Section 4.
"Losses" shall have the meaning set forth in Section 6(a).
"Nasdaq" shall mean the Nasdaq National Market.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"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 the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means the Shares and any shares of
Common Stock issuable upon any stock split, stock dividend, recapitalization or
similar event with respect to such Shares.
"Registration Statement" means the registration statement
contemplated by Section 2, including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
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"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 158" means Rule 158 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.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any special counsel to the Holders as
designated in writing by the Holders to the Company.
2. Registration. The Company shall use its best efforts to
prepare and file with the Commission, on or prior to the Filing Date, a "shelf"
Registration Statement covering all Registrable Securities for an offering to be
made on a continuous basis pursuant to Rule 415. The 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
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as practicable and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without restriction pursuant to Rule
144(k) promulgated under the Securities Act as determined by the counsel to the
Company pursuant to a written opinion letter, addressed to the Company's
transfer agent to such effect (the "Effectiveness Period").
3. Registration Procedures.
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Use its reasonable best efforts to prepare and file with
the Commission, on or prior to the Filing Date, a Registration Statement on Form
S-3 (or if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3 such registration shall be on another
appropriate form in accordance herewith) in accordance with the method or
methods of distribution thereof as specified by the Holders (except if otherwise
directed by the Holders), and cause the Registration Statement to become
effective and remain effective as provided herein; provided, however, that not
less than three (3) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated therein by reference), the
Company shall furnish to the Holders and to any Special Counsel copies of all
such documents proposed to be filed, which documents (other than those
incorporated by reference) will be subject to the review of such Holders and
such Special Counsel. The Company shall not file the Registration
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Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities or any Special
Counsel shall reasonably object in writing within two (2) Business Days of their
receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period; (ii) cause the
related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
(iii) respond as promptly as practicable to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and as promptly as practicable provide the Holders true and complete copies of
all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold
and any Special Counsel as promptly as practicable (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement and (C) with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event that makes any statement made in
the 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 the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
If required to obtain information necessary to complete the
Registration Statement, the Company shall promptly furnish to Special Counsel,
without charge, (i) a copy of any correspondence from the Commission or the
Commission's staff to the Company or its representatives relating to any
Registration Statement and (ii) promptly after the same is prepared and filed
with the Commission, a copy of any written response to the correspondence
received from the Commission.
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(d) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder and any Special Counsel, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto.
(f) Promptly deliver to each Holder upon request such number
of copies of the Prospectus and each amendment or supplement thereto as such
Holder may reasonably request to facilitate the disposition of Registrable
Securities owned by such Holder.
(g) Prior to any public offering of Registrable Securities,
use its best efforts to register or qualify such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary to
enable the disposition in such jurisdictions of the Registrable Securities
covered by a Registration Statement; provided, however, that the Company shall
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject.
(h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
Holder may request at least two (2) Business Days prior to any sale of
Registrable Securities.
(i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as practicable, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(j) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on the Nasdaq and any other
securities exchange, quotation system, market or over-the-counter bulletin
board, if any, on which similar securities issued by the Company are then
listed.
(k) Comply in all material respects with all applicable rules
and regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-five (45) days after the end of
any 12-month period (or ninety (90) days after the end of any 12-
5
month period if such period is a fiscal year) commencing on the first day of the
first fiscal quarter of the Company after the effective date of the Registration
Statement, which statement shall conform to the requirements of Rule 158.
(l) Require each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration Statement,
and the Company may exclude from such registration the Registrable Securities of
any such Holder who fails to furnish such information within a reasonable time
prior to the filing of each Registration Statement, supplemented Prospectus
and/or amended Registration Statement.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until: (a) it has
received copies of the Prospectus as then amended or supplemented as
contemplated in Section 3(f) and notice from the Company that such Registration
Statement and any post-effective amendments thereto have become effective as
contemplated by Section 3(c) and (ii) it and its officers, directors or
Affiliates, if any, will comply with the prospectus delivery requirements of the
Securities Act as applicable to them in connection with sales of Registrable
Securities pursuant to the Registration Statement and (b) any other trading
restrictions set forth in the Merger Agreement have been complied with and the
Lock-Up Period set forth in Section 4 has expired.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) or
3(c)(v), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(i), 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.
(m) If (i) there is material non-public information regarding
the Company which the Company's Board of Directors (the "Board") reasonably
determines in good faith not to be in the Company's best interest to disclose
and which the Company is not otherwise required to disclose, or (ii) there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines in good faith not to be in the
Company's best interest to disclose and which the Company would be required to
disclose under the Registration Statement, then the Company may suspend
effectiveness of a registration statement and suspend the sale of Registrable
Securities under a Registration Statement for a period not to exceed
seventy-five (75) consecutive days, provided that the Company may not suspend
its obligation under this Section 3(m) for more than one hundred fifty (150)
days in the aggregate during any twelve (12) month period (each, a "Blackout
Period").
(n) Within three (3) business days after the Registration
Statement which includes the Registrable Securities is ordered effective by the
Commission, the Company shall
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deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders whose
Registrable Securities are included in such Registration Statement) confirmation
that the Registration Statement has been declared effective by the Commission
substantially in the form attached hereto as Exhibit A.
4. Lock-Up.
Notwithstanding anything to the contrary contained herein and
subject to any Blackout Period, each Holder of Registrable Securities shall not
publicly sell (pursuant to an effective registration statement or otherwise),
publicly make any short sale of, publicly grant any option for the purchase of,
or otherwise publicly dispose of, sell, transfer, pledge, hypothecate, assign or
otherwise transfer any Registrable Securities other than in accordance with the
provisions of this Section 4 (the "Lock-Up"). Each Holder's Registrable
Securities shall be released from the Lock-Up, and shall become freely
transferable (subject to applicable registration requirements), in eighteen (18)
equal monthly installments commencing on the Closing Date. The Lock-Up shall
remain in full force and effect with respect to such Registrable Securities at
all times and any subsequent Holder of Registrable Securities shall be subject
to the provisions set forth in this Section 4. The share certificates
representing the Registrable Securities shall bear an appropriate legend stating
that such shares are subject to the Lock-Up set forth in this Section 4 of the
Registration Rights Agreement dated as of this date between Holder and the
Company.
5. Registration Expenses
All fees and expenses incident to the registration of the
Registrable Securities shall be borne by the Company, other than fees and
expenses of Special Counsel or any other counsel retained by the Holders in
connection with the transactions contemplated by this Agreement, which fees and
expenses shall be borne exclusively by the Holders, in each case whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses to be borne by the Company shall include, without limitation, the
following: (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Nasdaq and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, and (B) with respect to filings
required to be made with the Commission; (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters) and (vi) reasonable fees and expenses
incurred with respect to compliance with state securities or Blue Sky laws
(excluding fees and disbursements of counsel for the Holders in connection with
Blue Sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions). In addition, the Company shall be responsible
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for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
6. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents or employees, if any, of such
Holder and each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, and
the respective successors, assigns, estate and personal representatives of each
of the foregoing, to the fullest extent permitted by applicable law, from and
against any and all claims, losses, damages, liabilities, penalties, judgments,
costs (including, without limitation, costs of investigation) and expenses
(including, without limitation, attorneys' fees and expenses) (collectively,
"Losses"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or in any registration statement relating to a
piggy-back registration under Section 8 hereof, or arising out of or relating to
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, which information was reasonably relied on by
the Company for use therein. The Company shall notify the Holders promptly of
the institution, threat or assertion of any Proceeding of which the Company is
aware in connection with the transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, the directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons,
and the respective successors, assigns, estate and personal representatives of
each of the foregoing, to the fullest extent permitted by applicable law, from
and against all Losses, as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any Prospectus, or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or in any registration statement
relating to a piggy-back registration under Section 8 hereof, or arising solely
out of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in or
omitted from any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus and that such information was
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reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party) in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided that the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder.
(d) Contribution. If a claim for indemnification under Section
6(a) or 6(b) is unavailable to an Indemnified Party because of a failure or
refusal of a governmental authority to enforce such indemnification in
accordance with its terms (by reason of public policy or
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otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying, Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. 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.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
7. Rule 144.
As long as any Holder owns Registrable Securities, the Company
covenants to use its best efforts to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as any Holder owns Registrable
Securities, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders
and make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Person to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 promulgated
under the Securities Act.
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8. Piggy-Back Registrations. If at any time during the
Effectiveness Period the Company shall determine to prepare and file with the
Commission a registration statement for an underwritten public offering for its
own account under the Securities Act of any of its equity securities, other than
a registration statement 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, the
Company shall send to each Holder of Registrable Securities written notice of
such determination and, if within fifteen (15) days after receipt of such
notice, any such Holder shall so request in writing (which request shall specify
the Registrable Securities intended to be disposed of by the Holders), the
Company will cause the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Holder, to
the extent requisite to permit the disposition of the Registrable Securities so
to be registered, provided that if at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 8 for the same
period as the delay in registering such other securities. The Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the
Company shall not be required to register any Registrable Securities pursuant to
this Section 8 that are eligible for sale pursuant to Rule 144(k) of the
Securities Act. Furthermore, if the managing underwriter(s) or underwriter(s)
advises the Company that, in its opinion, the number of Registrable Securities
requested to be included in such registration statement exceeds the number which
can be sold in the offering covered by such registration statement without a
significant adverse effect on the offering and sale (including pricing, timing
or distribution) of the securities offered, and based on such determination
recommends inclusion in such registration statement of fewer or none of the
Registrable Securities of the Holders, then (x) the number of Registrable
Securities of the Holders included in such registration statement shall be
reduced pro-rata among such Holders (based upon the number of Registrable
Securities requested to be included in the registration), if the managing
underwriter(s) or underwriter(s) recommends the inclusion of fewer Registrable
Securities, or (y) none of the Registrable Securities of the Holders shall be
included in such registration statement, if the managing underwriter(s) or
underwriter(s) recommends the inclusion of none of such Registrable Securities.
9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for
11
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Holders acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
(ii) Each of the Company and the Holders (i) hereby
irrevocably submits to the jurisdiction of the United States District Court for
the Southern District of New York and the courts of the State of New York
located in New York county for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the Holders consents
to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section shall affect or
limit any right to serve process in any other manner permitted by law.
(c) 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 Holders of not less 51% of the Registrable Securities then owned by all
Holders. 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 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.
(d) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., New York
City time, on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than 5:00 p.m., New York
City time, on any date and earlier than 11:59 p.m., New York City time, on such
date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service or (iv) actual receipt by the
party to whom such notice is required to be given. The addresses for such
communications shall be with
12
respect to each Holder at its address set forth under its name on Schedule 1
attached hereto, or with respect to the Company, addressed to:
Starbase Corporation
0 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Vice President and
Chief Financial Officer
Facsimile no.: (000) 000-0000
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to any Holder shall be sent to the addresses
listed on Schedule 1 attached hereto, if applicable. Copies of notices to the
Company shall be sent to Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP, The Chrysler
Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxx
Xxxxxxxx, Esq., Facsimile no.: (000) 000-0000.
(e) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. Permitted assigns of the Company shall include any person or entity
which acquires all or substantially all of the capital stock or assets of the
Company or is the successor to the Company by merger, consolidation or other
similar transaction. No Holder shall assign its rights hereunder without the
prior written consent of the Company.
(f) 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.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law thereof. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.
(h) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable in any respect, 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
13
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
(j) Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed by their respective authorized
persons as of the date first indicated above.
STARBASE CORPORATION
By:
---------------------------------------------
Name:
Title:
SHAREHOLDER:
If Individual:
Print Name:
-------------------------------------
Signature:
-------------------------------------
14
If Corporation, Partnership, Limited Liability
Company or Other Entity:
Print Name of Entity:
-----------------------------------
Signature: By:
---------------------------------
15
EXHIBIT A -
REGISTRATION RIGHTS AGREEMENT
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
[ADDRESS]
Attn: _____________
Re: Starbase Corporation
--------------------
Ladies and Gentlemen:
We are counsel to Starbase Corporation, a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") among the
Company and the stockholders of the Company parties thereto (the "HOLDERS"),
dated as of __________ __, 2001, pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended (the
"1933 ACT"). In connection with the Company's obligations under the Registration
Rights Agreement, on ________________, 2001, the Company filed a Registration
Statement on Form ___ (File No. ___-________) (the "REGISTRATION STATEMENT")
with the Securities and Exchange Commission (the "SEC") relating to the resale
of the Registrable Securities which names each of the present Holders as a
selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of the Registration Statement.
Very truly yours,
By:
---------------------------------------
cc: [LIST NAMES OF HOLDERS]
16
SCHEDULE 1 TO THE
REGISTRATION RIGHTS AGREEMENT
FOR STARBASE CORPORATION
NAMES OF NUMBER OF
SHAREHOLDERS SHARES
--------------------------------------------------------
Xxxxxx, Xxxxx 3,543
Xxxxxx, Xxxxxxx 88,591
Xxxxx, Xxxxxx X. 7,087
Xxxxx, Xxxx X. 10,631
Xxxxxxxx, Xxxx 70,873
Xxxxx, Xxx 23,033
Xxxxx, Xxxxxxx X. 6,201
Xxxxx, Xxxxx X. 178,600
Xxxxx, Xxxxxxx 5,670
Xxxxxxxxx, Xxxxxx 354
Kavadellas Enterprises, Inc. 1,275
Xxxxxx, Xxxx 5,906
Xxx, Xxxxx X. 4,429
Xxxxx, Xxxxxxx X. 5,315
Xxxxx, Xxxxxx 12,756
Xxxxxxx, Xxxxxxxx 176
Xxxxx, Xxxxx 1,771
XxXxxxxxx, Xxxxx Xxxxx 5,315
Xxxxx, Xxxx 7,087
Xxxxxx, Xxx 9,745
Xxxxxxx, Xxxxxxxxxxx 590
Xxxxxxx, Xxxxxxxx 59
Xxxxxxxxx, Xxxxx 176
Xxxxxxx, Xxxxxxxxx 6,201
Xxxxxx, Xxxxxx X. 1,062
Xxxxxx, Xxxxxx 9,922
Xxxxxx, L. Xxxx 2,363
Xxxxxxxxx, Xxxxx 21,261
Xxxxxxxxxx, Xxxxx 709
Xxxxx, Xxxxx 11,517
Xxxx, Xxxxx X. 204,115
Xxxxx, Xxxxxxxx X. 76,543
Xxxxxxx, Xxxx X. 70,873
Xxxxxxx Enhanced Fund 2,229,886
Xxxxxxx Intellimedia Ventures 282,112
Guajolote Ranch 42,523
Kavadellas, Xxxxxxxx X. 649,340
Marriott, Xxxxxx X. 1,771
Oberlin Capital 427,570
River Cities Capital Fund Limited 2,427,365
Xxxxxxx, Xxxxxxx 266
Xxxxxxxx, Xxxxxxx 1,477
Xxxxxxxxxxxx, Xxxxx X. 278,473
Xxxx, Xxxxxx X. 42,523
Stonehenge Opportunity Fund 2,780,176
Updata Capital 209,602
Xxxxxxx, Xxxxx X. 278,449
------------------
TOTAL SHARES 10,505,280
WAIVER
------
Reference is made to that certain Registration Rights Agreement, dated
as of February 23, 2001 ("the Agreement"), by and among Starbase Corporation, a
Delaware corporation (the "Company"), and the stockholders of the Company that
are parties thereto. Capitalized terms used but not defined herein have the
meanings given to them in the Agreement.
Notwithstanding the provisions of Section 4 of the Agreement, this
shall confirm that the Lock-Up restrictions set forth in such Section 4 shall
not be applicable to the following number of shares of Common Stock (the
"Shares") which may be issuable to the following stockholders in connection with
the Merger Agreement:
Number of
Name Shares
----------------- -------------
Xxxxx Xxxx 204,115
Xxxxx Xxxxx 178,600
Xxxxxxxx Xxxxx 76,543
Xxxxxx Xxxxx 12,756
Xxxxxx Xxxx 42,523
Xxxxxxx Xxxxxx 88,591
Xxxx Xxxxxx 5,906
Xxxxxx Xxxxx 7,087
Xxxx Xxxxx 5,670
Xxxxxx Xxxxxx 9,922
Xxxxx Xxxxxxx 590
Xxxxxxxx Xxxxxxx 59
Xxxx Xxxxxx 2,363
Xxxx Xxxxxxxx 1,477
Xxxx Xxxxx 7,087
Xxxxxxxx Xxxxxxx 176
Xxxx Xxxxx 10,631
Xxxx Xxxxxxxx 70,873
Xxx Xxxxxxxxx 354
Xxxxxxx Xxxxxxx 266
The Ranch 42,523
Xxxxx Xxxxxxxxx 21,261
Xxxxx Xxxxxx 3,543
Xxxx Xxxxxxx 70,873
Xxx Xxxxx 23,033
Xxxxxxx Xxxxx 6,201
Xxxxx Xxx 4,429
Xxxxxxx Xxxxx 5,315
Xxxxx Xxxxx 1,771
Xxx Marriott 1,771
Xxx XxXxxxxxx 5,315
Xxx Xxxxxx 9,745
Xxxxx Xxxxxxxxx 176
Xxxxxxxxx Xxxxxxx 6,201
Xxx Xxxxxx 1,062
Xxxxx Xxxxxxxxxx 709
Xxxxx Xxxxx 11,517
This Waiver may be relied upon by the stockholders and by the Company's
Transfer Agent in connection with any transfers of the Shares.
Nothing in this Waiver shall be deemed to modify any other provision of
the Agreement, which shall remain in full force and effect.
Dated: February 22, 2001
STARBASE CORPORATION
By:
---------------------------------------
Name:
Title:
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