EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is entered into as of
December 9, 1999, by and between Insignia Solutions plc, a company organized and
existing under the laws of England and Wales (the "COMPANY"), with headquarters
located at 00000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and Castle Creek
Technology Partners LLC, an Illinois limited liability company located at 00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 (the "INITIAL
PURCHASER").
RECITALS
A. In connection with the Securities Purchase Agreement dated of even
date herewith by and between the Company and Initial Purchaser (the "SECURITIES
PURCHASE AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to Initial Purchaser (i) the
Company's American Depository Shares (the "ADSs"), each ADS representing one
ordinary shares of 20p each nominal value of the Company (the "ORDINARY
SHARES"); (ii) a warrant exercisable for ADSs, in the form attached as EXHIBIT
A to the Securities Purchase Agreement (the "INITIAL WARRANT"); and (iii) a
warrant in the form of EXHIBIT C to the Securities Purchase Agreement ( the
"RESET WARRANT", and together with the Initial Warrant, the "WARRANTS"). ADSs
issued and purchased pursuant to the Securities Purchase Agreement are herein
referred to as "SHARES" and ADSs issued or issuable upon exercise of the
Warrants are herein referred to as "WARRANT SHARES".
B. To induce 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.
AGREEMENTS
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 Initial Purchaser
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "PURCHASERS" means Initial Purchaser and any
transferees or assignees who agree to become bound by the provisions of this
Agreement in accordance with Article IX hereof (each, a "PURCHASER").
(b) "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("RULE 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(c) "REGISTRABLE SECURITIES" means the Shares and the
Warrant Shares issued or issuable with respect to the Warrants (without regard
to any limitations on exercise) and any shares of capital stock issued or
issuable, from time to time (with any adjustments), on or in exchange for or
otherwise with respect to the ADRs or any other Registrable Securities.
(d) "REGISTRATION STATEMENT" means a registration
statement of the Company under the Securities Act pursuant to the provisions of
this Agreement.
(e) "FUNDED AMOUNT" means Three Million Five Hundred
Thousand Dollars ($3,500,000).
1.2 CAPITALIZED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement.
ARTICLE II
REGISTRATION
2.1 MANDATORY REGISTRATION. The Company shall prepare and file as
soon as practicable but in any event on or prior to thirty (30) days after the
date of the Closing 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
(without regard to any limitations on exercise of the Warrants), including those
issuable upon full exercise of the Warrants purchased and sold at the Closing.
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 (which approval shall be rendered within 3 business
days after receipt thereof and shall not be unreasonably withheld, delayed or
denied)) the Initial Purchaser and its counsel at least seven (7) business days
(or fewer to the extent provided herein) prior to its filing or other
submission. The Company shall also prepare and file such amendments to
registration statements and such additional registration statements as may from
time to time be required by this Agreement.
2.2 UNDERWRITTEN OFFERING. If any offering pursuant to a Registration
Statement filed pursuant to Section 2.1 hereof involves an underwritten
offering, the Purchasers who hold a majority in interest of the Registrable
Securities subject to such underwritten offering, with the consent of Initial
Purchaser, shall have the right to select one legal counsel to represent them
and an investment banker or bankers and manager or managers to administer the
offering, which investment banker or
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bankers or manager or managers shall be reasonably satisfactory to the
Company, and all fees and expenses of which shall be paid by the Purchasers.
2.3 PAYMENTS BY THE COMPANY. The Company shall use its best efforts
to cause the Registration Statement filed pursuant to Section 2.1 hereof to
become effective as soon as practicable, but in no event later than the
ninetieth (90th) day (or the one hundred twentieth (120th) day if the SEC
reviews such Registration Statement) following the Closing Date (the
"REGISTRATION DEADLINE"). If any Registration Statement required to be filed
by the Company pursuant to Section 2.1 hereof is not declared effective by the
SEC on or before the applicable Registration Deadline (a "REGISTRATION
FAILURE"), or after such Registration Statement has been declared effective by
the SEC, sales of all the Registrable Securities cannot be made pursuant to the
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 SUSPENSION"), then the Company will make
payments to the Purchasers in such 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 herein) times (B) the sum of the aggregate Funded Amount
plus the amount payable to the Company under the Warrants times (C) the number
of months (prorated per day for partial months) following the Registration
Deadline prior to the date the Registration Statement filed pursuant to Section
2.1 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 Funded Amount times (F) the number of
months (prorated per day 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 the Registrable Securities can again be made. Amounts to be paid
pursuant to this Section 2.3 shall be paid to Purchasers based upon the number
of Shares and Warrant Shares owned and Warrant Shares issuable upon full
conversion of the Warrants by each Purchaser, 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 any given date, the "MULTIPLIER" shall mean, (i) during the first thirty
days following the Registration Deadline during which there is a Registration
Failure or a Registration Suspension, 0.01, (ii) from the thirty-first day of a
Registration Failure or Registration Suspension until the sixtieth such day,
0.015 and (iii) after the sixtieth day of a Registration Failure or
Registration Suspension, 0.02. Notwithstanding the foregoing, a Registration
Suspension effected by the Company pursuant to a Permitted Blackout shall not
give rise to an obligation to make such payments. For purposes hereof,
"PERMITTED BLACKOUT" shall mean the suspension of the Registration Statement
after the effective date upon the good faith determination by the Company's
Board of Directors that a material financing, acquisition or other
extraordinary corporate transaction is in the best interest of the Company and
its shareholders, and that disclosure thereof to the public would have a
material adverse effect on the ability of the Company to consummate such
material financing, acquisition or other extraordinary corporate transaction,
all after receiving advice to such effect from
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a nationally recognized investment banking firm or, to the extent appropriate,
the Company's counsel which has been engaged by the Company in connection with
such financing, acquisition or other extraordinary corporate transaction;
PROVIDED, HOWEVER, that (i) no more than two (2) such Permitted Blackouts may
be imposed during any period of twelve (12) consecutive months and (ii) the
aggregate duration of all Permitted Blackouts during any period of twelve (12)
consecutive months shall be no more than fifteen (15) business days.
2.4 PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration
of the Registration Period (as hereinafter defined) the Company shall file with
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
Purchaser who has a right to have Registrable Securities covered by a
Registration Statement pursuant to this Agreement written notice of such
determination and, if within fifteen (15) days after the date of such notice,
such Purchaser shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Purchaser requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of ADSs which
may be included in the Registration Statement because, in such underwriter(s)'
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include
in such Registration Statement only such limited portion of the Registrable
Securities with respect to which such Purchaser has requested inclusion
hereunder as the underwriter shall permit. Any exclusion of Registrable
Securities shall be made pro rata among the Purchasers seeking to include
Registrable Securities, in proportion to the number of Registrable Securities
sought to be included by such Purchasers; provided, however, that the Company
shall not exclude any Registrable Securities unless the Company has first
excluded all outstanding securities, the holders of which are not entitled to
inclusion of such securities in such Registration Statement or are not entitled
to pro rata inclusion with the Registrable Securities; and provided, further,
however, that, after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with holders of
other securities having the riht to include such securities in the Registration
Statement. No right to registration of Registrable Securities under this
Section 2.4 shall be construed to limit any registration required under Section
2.1 or 3.2 hereof. If an offering in connection with which a Purchaser is
entitled to registration under this Section 2.4 is an underwritten offering,
then each Purchaser whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement,
on the same terms and conditions as other ADSs included in such underwritten
offering. So long as a Registration Statement is effective and immediately
available for use so that all of the Registrable Securities may be sold in
reliance thereon, the provisions of this section shall not apply.
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2.5 ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
re-sale by Initial Purchaser and any other Purchasers of the Registrable
Securities and the Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
ARTICLE III
OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations, including with respect to each
Registration Statement to be filed hereunder:
3.1 The Company shall prepare promptly and file with the SEC each
Registration Statement required by Section 2.1, and cause each 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 Initial Purchaser) may be immediately sold
to the public without registration and without restriction as to the number of
Registrable Securities to be sold, whether pursuant to Rule 144 or otherwise
(the "REGISTRATION PERIOD"). Each such Registration Statement (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 each Registration
Statement as may be necessary to keep such Registration Statement effective and
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 such
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 such Registration Statement. In the event the number
of Shares available under a Registration Statement filed pursuant to this
Agreement is at any time insufficient to cover one hundred seventy five percent
(175%) of the ADSs issued or issuable pursuant to all of the then-issued
Warrants or the Securities Purchase Agreement (without regard to any
limitations on exercise contained therein), 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 Warrant Shares issued or issuable upon
exercise of the Warrants (without regard to any limitation on exercise
contained therein), in each case, as soon as
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practicable, but in any event within five (5) days. The Company shall cause
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.
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
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 each 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 and
availability for use thereof during the applicable Registration Period, (c)
take such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the applicable Registration
Period, and (d) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however, 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) provide
any undertakings that cause the Company material expense or burden, or (v) 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 shareholders.
3.5 In the event the Purchasers who hold a majority in interest of
the Registrable Securities being offered in an offering pursuant to a
Registration Statement or any amendment or supplement thereto under Section 2.1
or 3.2 hereof select 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, but shall not
bear any costs or expenses of the underwriting.
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
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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 to each Purchaser (or other
applicable document) as such Purchaser may request in writing. Unless such an
event is publicly announced, the Company shall not, without the consent of the
Purchaser, give such Purchaser any material non-public information, but shall
inform the Purchasers that such prospectus 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.
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 (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 counsel designated by 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, provided such
objection shall be communicated to the Company within 3 business days after
receipt of such Registration Statement by Purchaser.
3.9 Intentionally deleted.
3.10 At the request of any Purchaser, the Company shall furnish, on
the date of effectiveness of the Registration Statement and thereafter from
time to time on such dates as a Purchaser may reasonably request (a) an
opinion, dated as of such applicable date, from counsel representing the
Company addressed to the Purchasers and in form, scope and substance as is
customarily given in an underwritten public offering and (b) a letter, dated as
of such applicable date, from the Company's independent certified public
accountants addressed to the Purchasers and in form, scope and substance as
customarily given to underwriters in an underwritten public offering.
3.11 The Company shall make available for inspection by (i) any
Purchaser, (ii) any underwriter participating in any disposition pursuant to
the Registration Statement, (iii) attorneys and accountants retained by any
Purchaser, and (iv) attorneys retained by such underwriters (collectively, the
"INSPECTORS") all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector and cause
the Company's officers, directors and employees to supply all information which
any Inspector may reasonably request; provided, however, that each
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Inspector shall hold in confidence and shall not make any disclosure (except to
a Purchaser) of any Record or other information which the Company determines in
good faith to be confidential, and of which determination the Inspectors are so
notified in writing, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration Statement or is
otherwise required to be disclosed in such Registration Statement to permit
Purchaser to sell under such Registration Statement, (b) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or is otherwise required by
applicable law or legal process or (c) the information in such Records 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 relevant Purchaser). The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered
into confidentiality agreements (in form and reasonable substance satisfactory
to the Company) with the Company with respect thereto, substantially in the
form of this Section 3.11. Each Purchaser agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein shall be deemed to limit a Purchaser's
ability to sell Registrable Securities in a manner which is consistent with
applicable laws and regulations.
3.12 The Company shall hold in confidence and not make any disclosure
of information concerning a Purchaser provided to the Company excluding any
information provided by Purchaser for use in or in connection with a
Registration Statement 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 each Closing, the Company shall cause the listing
and the continuation of listing of all the Registrable Securities related to
such Closing and required to be covered by a Registration Statement on the
Nasdaq National Market, the New York Stock Exchange or the American Stock
Exchange and cause the Registrable Securities to be quoted or listed on each
additional national securities exchange or quotation system upon which the ADRs
are then listed or quoted.
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3.14 The Company shall provide a transfer agent and Depositary, which
may be a single entity, for the Registrable Securities not later than the
effective date of the applicable 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 two (2)
business days 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 Depositary 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.
3.16 At the request of any Purchaser, 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 a Registration Statement filed pursuant hereto 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, 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, but shall not be required to
incur any costs or expenses in connection therewith not otherwise provided
herein to be borne by the Company.
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 or 3.2 hereof without the consent of
Initial Purchaser and the holders of a majority of the Registrable Securities.
Without the consent of Initial Purchaser, until the effectiveness of the
Registration Statements contemplated by Section 2.1 hereof, the Company shall
not file any other Registration Statement for the sale of any securities,
whether for the account of the Company or any other person.
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3.20 The Registration Statement shall state that it covers such
indeterminate number of additional shares as may be issuable upon exercise of
the Warrants to prevent dilution resulting from stock splits, stock dividends
and other similar transactions.
ARTICLE IV
OBLIGATIONS OF THE PURCHASERS
In connection with the registration of the Registrable Securities, the
Purchasers shall have the following obligations:
4.1 Each 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 reasonably
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 Intentionally omitted.
4.5 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 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.
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4.6 Without limiting a Purchaser's rights under Section 2.1 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, custody agreements, 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 and any expenses in excess of those payable by the
Company pursuant to Article V. 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, shall be borne by the Company.
ARTICLE VI
INDEMNIFICATION
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, an "INDEMNIFIED PERSON"), against any losses,
claims, damages, liabilities or 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 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 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,
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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, to the extent permitted by law, 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 shareholder selling securities pursuant to the
Registration Statement, together with its directors, officers and members,
and any person who controls such shareholder 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
prior written consent of such Purchaser, which consent shall not be
unreasonably withheld; provided, further, however, that a Purchaser shall be
liable under this Agreement (including this Section 6.2 and Article VII) for
only that amount as does not exceed the net proceeds actually received by
such Purchaser
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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 the
Purchasers 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 (at its expense) to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume and continue 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 an
indemnifying party shall not be entitled to assume (or continue) such defense
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 the indemnifying 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. Notwithstanding any
assumption of such defense and without limiting any indemnification
obligation provided for in Section 6.1 or 6.2, the Indemnified Party or
Indemnified Persons, as the case may be, shall be entitled to be represented
by counsel (at its own expense if the indemnifying party is permitted to
assume and continue control of the defense and otherwise at he expense of the
indemnifying party) and such counsel shall be entitled to participate in such
defense. 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.
ARTICLE VII
CONTRIBUTION
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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 who was not guilty of such fraudulent
misrepresentation, and (ii) contribution (together with any indemnification
or other obligations under this Agreement) by any Purchaser of Registrable
Securities shall be limited in amount to the net amount of proceeds received
by such Purchaser from the sale of its Registrable Securities.
ARTICLE VIII
REPORTS UNDER THE EXCHANGE ACT
With a view to making available to each Purchaser the benefits of Rule
144, the Company agrees that so long as a Purchaser holds Warrants, any
Registrable Securities, the Company shall:
8.1(a) Not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
8.1(b) 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 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 promptly upon written 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 Purchaser to sell
such securities pursuant to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Purchasers hereunder as to Registrable Securities
transferred by a Purchaser (or represented by Warrants transferred by a
Purchaser), 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 Registrable
Securities 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 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
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name and address of such transferee or assignee, (ii) the securities with
respect to which such registration rights are being transferred or assigned
and (iii) the information specified in Section 3.12 to such transferee, (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 Warrants transferred) shall not be
assigned by virtue of the transfer of other Registrable Securities or
transferred Warrants representing other Registrable Securities.
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,
Initial Purchaser (so long as Initial Purchaser still beneficially owns
Registrable Securities) and Purchasers who hold a majority interest of the
Registrable Securities. Any amendment or waiver effected in accordance with
this Article X shall be binding upon each Purchaser and the Company.
Notwithstanding the foregoing, no amendment or waiver shall retroactively
affect any Purchaser without its consent or prospectively adversely affect
any Purchaser who no longer owns any Warrants, Registrable Securities without
its consent. No amendment or waiver may adversely affect one or more
Purchasers or group of Purchasers vis-a-vis any other Purchaser or group of
Purchasers. Neither Article VI nor Article VII hereof may be amended or
waived in a manner adverse to a Purchaser without its consent.
Notwithstanding anything to the contrary contained in this Article X, no
amendment or waiver shall be applicable to an Initial Purchaser who does not
consent in writing thereto.
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 Warrants which may be 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 Warrants, 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:
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If to the Company:
Insignia Solutions plc
00000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000)000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxx PC
0000 Xxxxxxxxxxx Xxxx
P. O. Xxx 00000
Xxxx Xxxx, Xxxxxxxxxx 00000
Telecopy: (000)000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
and if to Initial Purchaser:
Castle Creek Technology Partners LLC
c/o Castle Creek Partners LLC
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Portfolio Manager
with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
and 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.
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11.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed in the State of New York. The Company irrevocably consents to the
jurisdiction of the federal courts located in the state of New York and the
state courts of the State of New York located in the County of New York in
the State of New York 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 and the Securities Purchase Agreement (including
all schedules and exhibits thereto and all certificates and opinions required
thereby) 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 and the Securities Purchase 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 (and
without compliance therewith), the rights of a Purchaser hereunder shall be
assignable to and exercisable by a bona fide 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.
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11.10 Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by each Purchaser and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Purchasers and that
the remedy at law for any such breach may be inadequate.
11.11 The initial number of Registrable Securities included on any
Registration Statement and each increase to the number of Registrable
Securities included thereon shall be allocated pro rata among the Purchasers
based on the number of Registrable Securities held by each Purchaser at the
time of such establishment or increase, as the case may be. In the event a
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 ADSs 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 Purchasers, pro rata based on
the number of shares of Registrable Securities then held by such Purchasers.
Without implication that the contrary would otherwise be true, for purposes
of this paragraph, all Warrants then outstanding shall be assumed exercised
for Registrable Securities (without giving effect to any limitations on
exercise contained therein).
11.12 PAYMENT OF CASH; DEFAULTS. Whenever the Company is required to
make any cash payment to a Purchaser under this Agreement, such cash payment
shall be due on the date (the "CASH DUE DATE") that such Purchaser delivers
written notice from the Purchaser to the Company. Such cash payment shall be
made to the Purchaser by the method (by certified or cashier's check or wire
transfer of immediately available funds) elected by such Holder. If such
payment is not delivered within two (2) days of the Cash Due Date, such
Purchaser shall thereafter be entitled to interest on the unpaid amount at a
per annum rate equal to the lower of eighteen percent (18%) and the highest
interest rate permitted by applicable law until such amount is paid in full
to the Holder.
11.13 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.
* * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPANY:
INSIGNIA SOLUTIONS PLC
By: s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
PURCHASER:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: Castle Creek Partners, L.L.C.
Its: Investment Manager
By: s/Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Managing Member
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EXHIBIT 1
TO REGISTRATION
RIGHTS AGREEMENT
[Date]
[Name and address
of Depositary]
RE: INSIGNIA SOLUTIONS PLC
Ladies and Gentlemen:
We are counsel to Insignia Solutions plc, a company organized and
existing under the laws of England and Wales (the "COMPANY"), and we
understand that Castle Creek Technology Partners LLC (the "HOLDER") has
purchased from the Company American Depository Shares (the "ADSS") and
certain Warrants to purchase additional ADSs. The ADSs were purchased by the
Holder pursuant to a Securities Purchase Agreement, dated as of December __,
1999, by and among the Company and the Holder (the "AGREEMENT"). Pursuant
to a Registration Rights Agreement, dated as of December __, 1999, by and
among the Company and the Holder (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 _______ __, 1999, the Company filed a Registration Statement on
Form S-3 (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 shareholder thereunder.
[Other customary introductory and scope of examination language to be
inserted, in each case as reasonably acceptable to Holders.]
Based on the foregoing, we are of the opinion that the resale of
Registrable Securities have been registered under the Securities Act.
[Other appropriate customary language to be included, in each case as
reasonably acceptable to Holders.]
Very truly yours,
cc: Castle Creek Technology Partners LLC
