EXHIBIT 99.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of May
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29, 2001, by and between Odetics, Inc., a Delaware corporation (the "Company"),
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with its executive offices located at 0000 X. Xxxxxxxxxx Xxx., Xxxxxxx XX 00000,
and Castle Creek Technology Partners LLC with its principal place of business at
000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xxxxxxx, XX 00000 (the "Initial Purchaser").
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RECITALS
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A. In connection with the Securities Purchase Agreement of even date
herewith between the Company and the Initial Purchaser ("Securities Purchase
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Agreement"), the Company has agreed, upon the terms and subject to the
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conditions contained therein to issue and sell to the Initial Purchaser (i) a
Senior Convertible Promissory Note Secured by Deed of Trust ("Note") that is
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convertible into shares ("Conversion Shares") of the Company's Class A common
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stock, $.10 par value (the "Common Stock"); and (ii) a Closing Warrant, a
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Prepayment Warrant, and, upon the occurrence of certain conditions, a Default
Warrant, (each a "Warrant" and, when taken together with all of the Warrants
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issuable under the Securities Purchase Agreement, the "Warrants") entitling the
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holder thereof to purchase the number of shares of Common Stock set forth in the
Securities Purchase Agreement (the "Warrant Shares").
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B. To induce the Initial Purchaser to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws.
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AGREEMENTS
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NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, and the Initial
Purchaser hereby agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. As used in this Agreement, the following terms shall
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have the following meanings:
(a) "Purchasers" means the Initial Purchaser and any transferees or
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assignees who agree to become bound by the provisions of this Agreement in
accordance with Article IX hereof.
(b) "register," "registered," and "registration" refer to a
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registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
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of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
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(c) "Registrable Securities" means the Conversion Shares and the
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Warrant Shares issued or issuable with respect to any of the Warrants (without
regard to any limitations on conversion or exercise) and any shares of capital
stock or other securities issued or issuable, from time to time (with any
adjustments), on or in exchange for or otherwise with respect to the Note, the
Warrants, the Conversion Shares or the Warrant Shares or any other Registrable
Securities.
(d) "Registration Statement" means a registration statement of the
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Company under the Securities Act pursuant to the provisions of this Agreement.
(e) "SEC" means the U.S. Securities and Exchange Commission,
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1.2 Capitalized Terms. Capitalized terms used herein and not otherwise
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defined herein shall have the respective meanings set forth in the Securities
Purchase Agreement.
ARTICLE II
REGISTRATION
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2.1 Demand Registration. (a) At any time after November 29, 2001, the
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Purchaser shall have the right to deliver to the Company a written notice
demanding that the Company file, in accordance with the provisions of this
Article II, a Registration Statement under the Securities Act covering the
Registration of all the Registrable Securities which can legally be Registered
at the time the Registration Statement is to be declared effective.
(b) If the Company gives a notice of its election to pre-pay any
portion of the Note prior to November 29, 2001, and the Purchaser elects to
convert all or any portion of the principal outstanding under the Note into
Conversion Shares in accordance with the terms of the Note the Purchaser shall
have the right to deliver to the Company a written notice demanding the Company
file a Registration Statement under the Securities Act covering all the
Registrable Securities which can legally be Registered at the time the
Registration Statement is to be declared effective.
(c) The Company shall prepare and on or prior to twenty (20) days
after any demand under Section 2.1(a) or 2.1(b) file with the SEC a Registration
Statement on Form S-3 (or, if Form S-3 is not then available, on such form of
Registration Statement as is then available) to effect a registration of all of
the Registrable Securities which can legally be Registered at the time the
Registration Statement is to be declared effective. The Registration Statement
(and each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to (and subject to the approval of the
Initial Purchaser (which approval shall not be unreasonably withheld or denied))
and its counsel prior to its filing or other submission.
(d) Notwithstanding anything to the contrary in this Agreement, the
Company shall be entitled to postpone or suspend, for a period of time not to
exceed thirty (30) days (the "Blackout Period"), the filing of a Registration
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Statement pursuant to this Section 2.1, if the Board of Directors of the Company
determines in good faith that any such filing would:
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(i) materially impede, delay or otherwise interfere with any
pending material financing, acquisition, corporate reorganization or
other transaction involving the Company for which the Board of
Directors has authorized negotiations;
(ii) materially impair the ability to consummate any pending
material offering or sale of any class of securities by the Company;
or
(iii) require disclosure of material nonpublic information which,
if disclosed at such time, would be materially harmful to the
interests of the Company and its stockholders;
provided, however, that the Company shall only be entitled to exercise its
rights with respect to the Blackout Period once during any 12-month period.
2.2 Underwritten Offering. If any offering pursuant to a Registration
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Statement pursuant to Section 2.1 hereof involves an underwritten offering, the
Initial Purchaser shall have the right to select legal counsel to represent it
and an investment banker or bankers and manager or managers to administer the
offering, which investment banker or bankers or manager or managers shall be
reasonably satisfactory to the Company.
2.3 Payments by the Company. The Company shall cause each Registration
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Statement required to be filed pursuant to Section 2.1 hereof to become
effective as soon as practicable, but in no event later than the ninetieth
(90th) day following the applicable demand (the "Registration Deadline"). If a
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Registration Statement covering the Registrable Securities required to be filed
by the Company pursuant to Section 2.1 or Section 3.2 hereof is not declared
effective by the SEC on or before the applicable Registration Deadline (a
"Registration Failure"), or if after such Registration Statement has been
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declared effective by the SEC, sales of all the Registrable Securities covered
thereby cannot be made pursuant to such Registration Statement (by reason of a
stop order or the Company's failure to update the registration statement or any
other reason outside the control of the Purchasers) (a "Registration
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Suspension"), then the Company shall make payments to the Purchasers in such
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amounts and at such times as shall be determined pursuant to this Section 2.3 as
partial relief for the damages to the Purchasers by reason of any such delay in
or reduction of their ability to sell the Registrable Securities (which remedy
shall not be exclusive of any other remedies available at law or in equity). In
the event of a Registration Failure, the Company shall pay to the Purchasers an
amount equal to (A) the Multiplier (as defined below) times (B) the Proposed
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Maximum Aggregate Offering Price stated on the cover page of the Registration
Statement times (C) the number of months (prorated per day for partial months)
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following the applicable Registration Deadline prior to the date the applicable
Registration Statement filed pursuant to Section 2.1 or Section 3.2 is declared
effective by the SEC. In addition, in the event of a Registration Suspension,
the Company shall pay to the Purchasers an amount equal to (D) the Multiplier
times (E) the Proposed Maximum Aggregate Offering Price stated on the cover page
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of the Registration Statement times (F) the number of months (prorated per day
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for partial months) from (x) the date on which sales of all the Registrable
Securities first cannot be made to (y) the date on which sales of all such
Registrable Securities can again be made. With respect to any given Registration
Statement, amounts to be paid pursuant to this Section 2.3 shall be paid pro
rata to Purchasers based upon
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the number of Conversion Shares and/or Warrant Shares owned by them (including,
for these purposes, Conversion Shares issuable upon full conversion of the Note
(being a partial conversion if determined before maturity) and Warrant Shares
issuable upon full exercise of each Warrant by each Purchaser, in each case
without regard to any limitations upon exercise and conversion contained
therein) and shall be paid in cash. Such payments shall be made within five (5)
days after the end of each period that gives rise to such obligation, provided
that, if any such period extends for more than thirty (30) days, payments shall
be made for each such thirty (30) day period within five (5) days after the end
of such thirty (30) day period. For purposes of this Section 2.3, the
"Multiplier" is equal to (a) for the first thirty (30) days in the aggregate of
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any Registration Failures and Registration Suspensions, 0.01; (b) for the second
thirty (30) days in the aggregate of any Registration Failures and Registration
Suspensions, 0.015; (c) for the third thirty (30) days in the aggregate and all
successive thirty (30) day periods thereafter in the aggregate of any
Registration Failures and Registration Suspensions, 0.02. Without limiting the
foregoing, the Company shall not permit any Registration Statement after it
becomes effective to cease to be effective or available for use for five
consecutive trading days or ten trading days in any twelve month period.
2.4 Piggy-Back Registrations. If at any time the Company shall file with
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the SEC a Registration Statement relating to an offering for its own account or
the account of others under the Securities Act of any of its equity securities
(other than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans), then the Company shall send to each holder of
Registrable Securities or securities convertible into or exercisable for
Registrable Securities ("Holder"), written notice to each holder of Registrable
Securities or securities convertible into or exercisable for Registrable
Securities not later than 15 Business Days prior to the anticipated filing date
of such Registration Statement. Such notice shall offer to include in such
Registration Statement such Registrable Securities as each such Holder may
request, subject to the conditions set forth herein. Should any Holder desire to
include any of such Registrable Securities in such Registration Statement, such
Holder shall so advise the Company in writing not less than 10 calendar days
after receipt of the Company's notice, setting forth the number of shares of
Common Stock which such Holder desires to have included in the Registration
Statement.
2.5 Reduction of Offering. Notwithstanding anything contained herein, if
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the managing underwriter of an offering described in Sections 2.1, 2.2, 2.3 or
2.4 delivers a written opinion to the Holders of the Registrable Securities to
be included in such offering stating that because of the size of the offering
that the Holders, the Company and any other Person intend to make, the success
of the offering would be materially and adversely affected by inclusion of any
such securities, the amount of securities to be included in such offering shall
only be so many of such securities as the managing underwriter believes will not
jeopardize the success of the offering and the securities to be included shall
be apportioned (x) in the case of an offering described in Section 2.1 or 2.2
hereof, first to the Holders making the demand; second, pro rata among the
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Registrable Common Securities held by all other Holders desiring to register
Registrable Securities thereon; and third, to the Company; (y) in the case of an
offering described in Section 2.4 hereof, first to the Company and/or the
holders of Common Stock being registered other than upon exercise of rights
created by Section 2.4; second, pro rata among all Holders of Registrable
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Securities according to the total number of shares of Registrable Securities
requested
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for inclusion by said Holders; and third, to any other holders of Common Stock
(collectively, the "Priorities").
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2.6 Provisions Cumulative. The respective rights of the Holders of
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Registrable Securities pursuant to Sections 2.1, 2.2, 2.3 and 2.4 are
cumulative, and the exercise of rights under one such Section shall not exclude
the subsequent exercise of rights under another such Section.
2.7 Eligibility for Form S-3. The Company represents and warrants that it
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is currently eligible to register the resale of the Conversion Shares, Warrant
Shares and all Registrable Securities by the Purchaser on a Registration
Statement on Form S-3 under the Securities Act for the account of Purchaser. The
Company shall file all reports required to be filed by the Company with the SEC
in a timely manner and take all other actions which may be required so as to
maintain such eligibility for the use of Form S-3.
ARTICLE III
OBLIGATIONS OF THE COMPANY
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In connection with the registration of the Registrable Securities, the
Company shall have the following obligations, including with respect to each
Registration Statement required to be filed hereunder:
3.1 The Company shall prepare promptly and file with the SEC the
Registration Statement required by Section 2.1, and cause such Registration
Statement relating to Registrable Securities to become effective as soon as
practicable after such filing, and keep the Registration Statement effective
pursuant to Rule 415 and available for use at all times until such date as is
the earlier of (i) the date on which all of the Registrable Securities have been
sold (and no further Registrable Securities may be issued in the future) and
(ii) the date on which all of the Registrable Securities (in the reasonable
opinion of counsel to the Initial Purchaser) may be immediately sold to the
public without registration and without restriction as to the number of
Registrable Securities to be sold or the manner of such sale, whether pursuant
to Rule 144 or otherwise (the "Registration Period"). The Registration Statement
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(including any amendments or supplements thereto and prospectuses contained
therein and all documents incorporated by reference therein) shall not contain
any 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 not
misleading.
3.2 The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective and immediately
available for use at all times during the Registration Period, and, during such
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statement until the termination of the Registration Period or, if
earlier, such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement. If, at any time after
failure to pay all obligations due under the Note at Maturity, the number of
shares available under a
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Registration Statement filed pursuant to this Agreement is, at any time,
insufficient to cover one hundred fifty percent (150%) of the Registrable
Securities issued or issuable upon full conversion of the Note and exercise of
all the Warrants (in each case, without giving effect to any limitation on
conversion or exercise thereof) held by any Purchaser and required to be covered
by such Registration Statement pursuant to Section 2.1, 2.2 or this Section 3.2,
the Company shall amend, if permissible, the Registration Statement, or file a
new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover two hundred percent (200%) of the
Registrable Securities issued or issuable to such Purchaser upon such exercise
or conversion (in each case, without giving effect to any limitation on
conversion or exercise thereof), in each case, as soon as practicable, but in
any event within five (5) business days. The Company shall cause such amendment
and/or new Registration Statement to become effective as soon as practicable
following the filing thereof, but in any event within five (5) business days
with respect to an amendment and ten (10) business days with respect to a new
Registration Statement (each such deadline also being a "Registration
Deadline").
Notwithstanding the foregoing, in the event the SEC reviews an amendment or
a new Registration Statement filed pursuant to this Agreement and so long as (i)
the Company in good faith uses its best efforts to address and resolve each and
all of the SEC comments made pursuant to such review and (ii) the Purchaser may
sell up to and including 100% of the Registrable Securities under an effective
Registration Statement which is immediately available for use so that all of the
Registrable Securities may be sold in reliance thereon, then the Company shall
not be subject to the payment provisions of Section 2.3 until such date of not
more than thirty (30) days from the date when such Registration Deadline or
Registration Failure first occurred.
3.3 The Company shall furnish to each Purchaser whose Registrable
Securities are included in the Registration Statement and its legal counsel (a)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2.1, each letter written by or on behalf of the Company to the SEC
or the staff of the SEC, and each item of correspondence from the SEC or the
staff of the SEC, in each case relating to such Registration Statement (other
than any portion, if any, thereof which contains information for which the
Company has sought confidential treatment), and (b) such number of copies of a
prospectus, including a preliminary prospectus, and all the amendments and
supplements thereto and such other documents as such Purchaser may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned (or to be owned) by such Purchaser.
3.4 The Company shall (a) register and qualify the Registrable Securities
covered by the Registration Statement under securities laws of such
jurisdictions in the United States as each Purchaser who holds (or has the right
to hold) Registrable Securities being offered reasonably requests, (b) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof and availability for use during
the Registration Period, (c) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (d) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however,
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that the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3.4, (ii) subject itself
to general taxation in any such jurisdiction, (iii) file a general consent to
service of process in any such jurisdiction, (iv) make any change in its charter
or by-laws, which in each case the board of directors of the Company determines
to be contrary to the best interests of the Company and its stockholders.
3.5 In the event the Purchaser in an offering pursuant to a Registration
Statement or any amendment or supplement thereto under Section 2.1 or Section
3.2 hereof elect underwriters for the offering, the Company shall enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.
3.6 As soon as practicable after becoming aware of such event, the
Company shall notify (by telephone and also by facsimile and reputable overnight
courier) each Purchaser of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its best efforts as soon as
possible (but in any event within five (5) days) to prepare a supplement or
amendment to the Registration Statement (and make all required filings with the
SEC) to correct such untrue statement or omission, and the Company shall
simultaneously (and thereafter as requested) deliver such number of copies of
such supplement or amendment (or other applicable document) to each Purchaser as
such Purchaser may request in writing.
3.7 The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest practicable time and the Company shall immediately notify by facsimile
each Purchaser (at the facsimile number for such Purchaser set forth on the
signature page hereto) who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance of
such order and the resolution thereof.
3.8 The Company shall permit a counsel designated by the Initial
Purchaser to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC, and not file any document in a form to which such counsel reasonably
objects.
3.9 The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
3.10 Intentionally Omitted.
3.11 Intentionally Omitted.
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3.12 The Company shall hold in confidence and not make any disclosure of
information concerning a Purchaser provided to the Company unless (a) disclosure
of such information is necessary to comply with federal or state securities
laws, (b) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (c) the release of such
information is ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or is otherwise required by
applicable law or legal process, (d) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement (to the knowledge of the Company), or (e) such Purchaser
consents to the form and content of any such disclosure. The Company agrees
that it shall, upon learning that disclosure of such information concerning a
Purchaser is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Purchaser prior
to making such disclosure, and allow the Purchaser, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
3.13 From and after Closing, the Company shall cause the listing and the
continuation of listing of all the Registrable Securities on Nasdaq National
Market and the Company and cause the Registrable Securities to be quoted or
listed on each additional national securities exchange or quotation system upon
which the Common Stock is then listed or quoted.
3.14 The Company shall provide a transfer agent and registrar, which may
be a single entity, for the Registrable Securities not later than the effective
date of the Registration Statement.
3.15 The Company shall cooperate with the Purchasers who hold Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, as the managing underwriter
or underwriters, if any, or the Purchasers may reasonably request and registered
in such names as the managing underwriter or underwriters, if any, or the
Purchasers may request, and, within one (1) business day after a Registration
Statement which includes Registrable Securities is ordered effective by the SEC,
the Company shall cause legal counsel selected by the Company to deliver, to the
transfer agent for the Registrable Securities (with copies to the Purchasers
whose Registrable Securities are included in such Registration Statement) an
opinion of such counsel in the form attached hereto as Exhibit 1.
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3.16 At the request of any Purchaser and to the extent permitted by
applicable law, the Company shall promptly prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
3.17 The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities covered by the
Registration Statement and all applicable rules and regulations of governmental
authorities in connection therewith (including,
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without limitation, the Securities Act and the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the Commission).
3.18 The Company shall take all such other actions as any Purchaser or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities.
3.19 From and after the date of this Agreement, the Company shall not, and
shall not agree to, allow the holders of any securities of the Company (other
than Purchasers with respect to Registrable Securities) to include any of their
securities in any Registration Statement or any amendment or supplement thereto
under Section 2.1, 2.2 or 3.2 hereof without the consent of the Initial
Purchaser.
3.20 The Registration Statement shall state that it covers such
indeterminate number of additional shares as may be issuable upon conversion of
the Convertible Securities or exercise of the Warrants to prevent dilution
resulting from stock splits, stock dividends and other similar transactions.
ARTICLE IV
OBLIGATIONS OF THE PURCHASERS
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In connection with the registration of the Registrable Securities, each
Purchaser shall have the following obligations:
4.1 Purchaser shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be required to
effect the registration of such Registrable Securities. At least five (5)
business days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Purchaser of the information the
Company requires from each such Purchaser.
4.2 Each Purchaser, by such Purchaser's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statements hereunder, unless such Purchaser has notified the Company in writing
of such Purchaser's election to exclude all of such Purchaser's Registrable
Securities from the Registration Statement.
4.3 Each Purchaser whose Registrable Securities are included in a
Registration Statement understands that the Securities Act may require delivery
of a prospectus relating thereto in connection with any sale thereof pursuant to
such Registration Statement, and each such Purchaser shall use its reasonable
efforts to comply with the applicable prospectus delivery requirements of the
Securities Act in connection with any such sale.
4.4 Each Purchaser agrees that, upon receipt of written notice from the
Company of the happening of any event of the kind described in Section 3.6, such
Purchaser will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Purchaser's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3.6 or advice that a supplement or amendment
is
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not required and, if so directed by the Company, such Purchaser shall deliver to
the Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Purchaser's possession
(other than a limited number of permanent file copies), of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Purchaser's obligations under this paragraph shall in no way limit the
Company's obligations under this Agreement or Purchaser's rights or remedies
against the Company with respect to any breach or threatened breach by the
Company of any such obligations.
4.5 Without limiting a Purchaser's rights under Section 2.1, 2.2 or 3.2
hereof, no Purchaser may participate in any underwritten distribution hereunder
unless such Purchaser (a) agrees to sell such Purchaser's Registrable Securities
on the basis provided in any underwriting agreements in usual and customary form
entered into by the Company pursuant to Section 3.5 hereof, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (c) agrees to pay its pro rata share of all
underwriting discounts and commissions. Without implication that the contrary
would otherwise be true, it is expressly understood and agreed that no Purchaser
shall be required to participate in any such underwritten distribution.
ARTICLE V
EXPENSES OF REGISTRATION
All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Articles
II and III, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of the
Inspectors selected by the Initial Purchaser pursuant to Section 3.11, hereof
shall be borne by the Company.
ARTICLE VI
INDEMNIFICATION
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In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify, hold
harmless and defend (a) each Purchaser who holds such Registrable Securities,
(b) each underwriter of Registrable Securities and (c) the directors, officers,
partners, members, employees, agents and persons who control any Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), if any, (each,
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an "Indemnified Person"), against any losses, claims, damages, liabilities or
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expenses (collectively, together with actions, proceedings or inquiries whether
or not in any court, before any administrative body or by any regulatory or
self-regulatory organization, whether commenced or threatened, in respect
thereof, "Claims") to which any of them may become subject insofar as such
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Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements
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therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). The
----------
Company shall reimburse each such Indemnified Person, promptly as such expenses
are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6.1: (x) shall
not apply to an Indemnified Person with respect to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof or
supplement thereto; (y) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (z) with respect
to any preliminary prospectus, shall not inure to the benefit of any Indemnified
Person if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, if such corrected prospectus was timely made
available by the Company pursuant to Section 3.3 hereof, and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus prior
to the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by a Purchaser pursuant to Article IX.
6.2 In connection with any Registration Statement in which a Purchaser is
participating, each such Purchaser agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner set forth in Section 6.1, the
Company, each of its directors, each of its officers who signs the Registration
Statement, its employees, agents and persons, if any, who control the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and any other stockholder selling securities pursuant to the
Registration Statement, together with its directors, officers and members, and
any person who controls such stockholder or underwriter within the meaning of
the Securities Act or the Exchange Act (such an "Indemnified Party"), against
-----------------
any Claim to which any of them may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such Claim arises out of or is based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Purchaser expressly for use in connection with
such Registration Statement; and such Purchaser will reimburse any legal or
other expenses (promptly as such expenses are incurred and are due and payable)
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6.2 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the
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prior written consent of such Purchaser, which consent shall not be unreasonably
withheld; provided, further, however, that a Purchaser shall not be liable under
this Agreement (including this Section 6.2 and Article VII) for any amount that
exceeds the net proceeds actually received by such Purchaser as a result of the
sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by a Purchaser pursuant to Article IX.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6.2 with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented, and the Indemnified Party failed to utilize such corrected
prospectus.
6.3 Promptly after receipt by an Indemnified Person or Indemnified Party
under this Article VI of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Article VI, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that such indemnifying party shall diligently pursue such defense and
that such indemnifying party shall not be entitled to assume such defense and an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
conflicts of interest between such Indemnified Person or Indemnified Party and
any other party represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Person or the Indemnified Party and any such Indemnified Person or
Indemnified Party reasonably determines that there may be legal defenses
available to such Indemnified Person or Indemnified Party which are different
from or in addition to those available to such indemnifying party. The
indemnifying party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and such legal
counsel shall be selected by Purchasers holding a majority-in-interest of the
Registrable Securities included in the Registration Statement to which the Claim
relates (with the approval of the Initial Purchaser if it holds Registrable
Securities included in such Registration Statement), if the Purchasers are
entitled to indemnification hereunder, or by the Company, if the Company is
entitled to indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Article VI,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Article VI
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
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ARTICLE VII
CONTRIBUTION
------------
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Article
VI to the fullest extent permitted by law; provided, however, that (i) 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 of
Registrable Securities who was not guilty of such fraudulent misrepresentation,
and (ii) contribution (together with any indemnification or other obligations
under this Agreement) by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities.
ARTICLE VIII
REPORTS UNDER THE EXCHANGE ACT
------------------------------
With a view to making available to the Purchasers the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Purchasers to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
--------
8.1 File with the SEC in a timely manner and make and keep available all
reports and other documents required of the Company under the Securities Act and
the Exchange Act so long as the Company remains subject to such requirements (it
being understood that nothing herein shall limit the Company's obligations under
Section 4.3 of the Securities Purchase Agreement) and the filing and
availability of such reports and other documents is required for the applicable
provisions of Rule 144; and
8.2 Furnish to each Purchaser so long as such Purchaser holds Convertible
Securities or Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Purchasers to sell such securities pursuant
to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
---------------------------------
The rights of the Purchasers hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assigned by each Purchaser to any transferee of all or any portion
of the Convertible Securities or the Registrable Securities, so long as such
securities held by a transferee represent, on an as converted or exercised
basis, as the case may be, not less than an aggregate of 50,000 shares of Common
Stock (Conversion Shares and Warrant Shares combined) if: (a) the Purchaser
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a
-13-
reasonable time after such assignment, (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such transferee or assignee, and (ii) the securities with
respect to which such registration rights are being transferred or assigned, (c)
following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
or applicable state securities laws, and (d) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing for the benefit of the Company to be
bound by all of the provisions contained herein. The rights of a Purchaser
hereunder with respect to any Registrable Securities not transferred (and not
represented by Convertible Securities or the Warrant transferred) shall not be
assigned by virtue of the transfer of other Registrable Securities or
transferred Convertible Securities or the Warrant representing other Registrable
Securities. Any such transferee who succeeds to rights hereunder shall be deemed
to have a separate agreement with the Company independent of this Agreement.
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
--------------------------------
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company and the Initial
Purchaser. In the event of the assignment of rights hereunder pursuant to
Article IX, the Company shall not take any action pursuant to such assignment of
rights that would adversely affect Initial Purchaser's rights hereunder without
Initial Purchaser's consent. In addition, should the Company take any action or
refrain from any action with respect thereto, Initial Purchaser shall be
entitled to, at its option, have the Company take such action or refrain from
such action with respect to Initial Purchaser hereunder.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 A person or entity is deemed to be a holder (or a holder in interest)
of Registrable Securities whenever such person or entity owns of record such
Registrable Securities (or the Convertible Securities or the Warrant which may
be converted into or exercised for Registrable Securities). If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities (or Convertible Securities or
the Warrant, as the case may be).
11.2 Any notices herein required or permitted to be given shall be in
writing and may be personally served or delivered by courier or by machine-
generated confirmed telecopy, and shall be deemed delivered at the time and date
of receipt (which shall include telephone line facsimile transmission). The
addresses for such communications shall be:
If to the Company:
Odetics, Inc.
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
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Telecopy: 000-000-0000
Attention: Xxxx Xxxxx
with a copy to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: 000-000-0000
Attention: X. X. Xxxxxx, Esq.
if to any Purchaser, at such address as such Purchaser, shall have provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11.2.
11.3 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
11.4 This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to contracts made and to be
performed in the State of Illinois. The Company irrevocably consents to the
jurisdiction of the federal courts located in Chicago, Illinois in any suit or
proceeding based on or arising under this Agreement and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives the defense of an inconvenient forum to
the maintenance of such suit or proceeding. The parties hereto further agree
that service of process upon the parties hereto mailed by first class mail shall
be deemed in every respect effective service of process upon each such party in
any such suit or proceeding. Nothing herein shall affect either party's right to
serve process in any other manner permitted by law. The parties hereto agree
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
11.5 This Agreement, the Securities Purchase Agreement, the Note, the
Warrants, the Deed of Trust and the Indemnity Agreement (including all schedules
and exhibits to such agreements and documents and all certificates and opinions
required by such agreements and documents) constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Note, the Warrants,
the Securities Purchase Agreement, the Deed of Trust and the Indemnity Agreement
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.
11.6 Subject to the requirements of Article IX hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto. Notwithstanding anything to the contrary contained
herein, including, without limitation, Article IX, the rights of a Purchaser
hereunder shall be assignable to and exercisable by a bona fide
-15-
pledgee of the Registrable Securities in connection with a Purchaser's margin or
brokerage accounts.
11.7 The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
11.8 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto, by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
11.9 Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
11.10 In the event Purchaser shall sell or otherwise transfer any of such
holder's Registrable Securities, each transferee shall be allocated a pro rata
portion of the number of Registrable Securities included on a Registration
Statement for such transferor. Any shares of Common Stock included on a
Registration Statement and which remain allocated to any person or entity which
does not hold any Registrable Securities shall be allocated to the remaining
participant, in such Registration Statement, pro rata based on the number of
shares of Registrable Securities then held by such participant. Without
implication that the contrary would otherwise be true, for purposes of this
paragraph, all Convertible Securities and Warrants then outstanding shall be
assumed converted into and exercised for Registrable Securities (without giving
effect to any limitations on conversion or exercise).
11.11 If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement.
-16-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.
COMPANY:
ODETICS, INC.
By: /s/ Xxxxxxx X. Xxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxx
______________________________
Title: C.O.O.
_____________________________
PURCHASER:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: CASTLE CREEK PARTNERS, L.L.C.
Its: Investment Manager
By: /s/ Xxxxxx X. Xxxx
_____________________________________
Name: Xxxxxx X. Xxxx
______________________________
Title: Managing Director
_____________________________
-17-
EXHIBIT 1
to Registration
Rights Agreement
[Date]
[Name and address
of transfer agent]
RE: ODETICS, INC.
Ladies and Gentlemen:
We are counsel to Odetics, Inc., a Delaware corporation (the "Company"),
-------
and we understand that [Name of Purchaser] (the "Holder") has purchased from the
------
Company a Promissory Note Secured by Deed of Trust (the "Note") convertible into
----
shares of the Company's common stock, no par value (the "Common Stock") and/or a
------------
Warrant to purchase shares of Common Stock. The Note and the Warrants were
purchased by the Holder pursuant to a Securities Purchase Agreement, dated as of
May __, 2001, by and among the Company and the signatories thereto (the
"Agreement"). Pursuant to a Registration Rights Agreement, dated as of May __,
---------
2001, by and among the Company and the signatories thereto (the "Registration
------------
Rights Agreement"), the Company agreed with the Holder, among other things, to
----------------
register the Registrable Securities (as that term is defined in the Registration
Rights Agreement) under the Securities Act of 1933, as amended (the "Securities
----------
Act"), upon the terms provided in the Registration Rights Agreement. In
---
connection with the Company's obligations under the Registration Rights
Agreement, on _______________, 200_, the Company filed a Registration Statement
on Form S-_____ (File No. 333- __________) (the "Registration Statement") with
----------------------
the Securities and Exchange Commission (the "SEC") relating to the Registrable
---
Securities, which names the Holder as a selling stockholder thereunder.
[Other customary introductory and scope of examination language to be
inserted]
Based on the foregoing, we are of the opinion that the Registrable
Securities have been registered under the Securities Act.
[Other appropriate customary language reasonably acceptable to holder to be
included.]
Very truly yours,
cc: [Name of Purchaser]
