Exhibit 99.2
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of November 5, 2001, by and among RSA Security Inc., a
Delaware corporation, with headquarters located at 00 Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Company"), and the undersigned buyers (each, a "Buyer"
and collectively, the "Buyers").
WHEREAS:
A. In connection with (i) a certain Securities Purchase Agreement by
and among the Company and the investors set forth therein (the "Initial Buyers")
dated as of October 17, 2001 (the "October 17, 2001 Securities Purchase
Agreement") and (ii) a certain Securities Purchase Agreement dated as of October
29, 2001 by and among two of the Initial Buyers and the Company (the "October
29, 2001 Securities Purchase Agreement", and, together with the October 17, 2001
Securities Purchase Agreement, the "Initial Securities Purchase Agreements", the
Company agreed, upon the terms and subject to the conditions of the Initial
Securities Purchase Agreements, to issue and sell to the Initial Buyers an
aggregate of up to (i) $70,000,000 of the Company's 7% Convertible Debentures
due October 17, 2004 (such Convertible Debentures, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Initial Convertible Debentures"), which will be convertible into shares of
the Company's common stock, par value $0.01 per share (the "Common Stock") (as
converted, the "Initial Conversion Shares"), and (ii) warrants (the "Initial
Warrants") to purchase shares of Common Stock (as exercised collectively, the
"Initial Warrant Shares");
B. To induce the Initial Buyers to execute and deliver the Initial
Securities Purchase Agreements, the Company agreed to provide certain
registration rights to the Initial Buyers under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933 Act"), and applicable state securities laws
under an Amended and Restated Registration Rights Agreement dated as of October
29, 2001 (the "Registration Rights Agreement");
C. In connection with the Securities Purchase Agreement by and among
the Company and the buyers named therein (the "Additional Buyers", and, together
with the Initial Buyers, the "Buyers") of even date herewith (the "Additional
Securities Purchase Agreement", and collectively with the Initial Securities
Purchase Agreements, the "Securities Purchase Agreements"), the Company has
agreed, upon the terms and subject to the conditions of the Additional
Securities Purchase Agreement, to issue and sell to the Additional Buyers an
aggregate of up to (i) $10,000,000 of the Company's 7% Convertible Debentures
due October 17, 2004 (such Convertible Debentures, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Additional Convertible Debentures" and collectively with the Initial
Convertible Debentures, the "Convertible Debentures"), which
will be convertible into shares of the Company's Common Stock (as converted, the
"Additional Conversion Shares" and collectively with the Initial Conversion
Shares, the "Conversion Shares"), and (ii) warrants (the "Additional Warrants"
and collectively with the Initial Warrants, the "Warrants") to purchase shares
of Common Stock (as exercised collectively, the "Additional Warrant Shares" and
collectively with the Initial Warrant Shares, the "Warrant Shares");
D. To induce the Additional Buyers to execute and deliver the
Additional Securities Purchase Agreement and the Initial Buyers to consent to
the transactions contemplated by the Additional Securities Purchase Agreement,
the Company has agreed to amend and restate the Registration Rights Agreement in
its entirety and such Registration Rights Agreement shall be amended and
superceded in its entirety by this Agreement; and
E. The location of defined terms in this Agreement is set forth on
the Index of Terms attached hereto.
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 each
of the Buyers hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
a. "Business Day" means any day other than Saturday, Sunday or
any other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
b. "Initial Closing Date" means October 17, 2001.
c. "Investor" means a Buyer, any transferee or assignee thereof
to whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.
d. "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and governmental or any department or agency thereof.
e. "register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").
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f. "Registrable Securities" means (i) the Conversion Shares
issued or issuable upon conversion of the Convertible Debentures, (ii) the
Warrant Shares issued or issuable upon exercise of the Warrants and (iii) any
shares of capital stock issued or issuable with respect to the Conversion
Shares, the Convertible Debentures, the Warrant Shares or the Warrants as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, without regard to any limitations on conversions of the
Convertible Debentures; provided, however, that shares of Common Stock which are
Registrable Securities shall cease to be Registrable Securities (A) upon any
sale pursuant to a Registration Statement, Rule 144 under the 1933 Act or upon
any sale in any manner to a person or entity which, by virtue of Section 9 of
this Agreement, is not entitled to the rights provided in this Agreement or (B)
at such time as all such shares may be sold under Rule 144(k).
g. "Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Initial Securities Purchase
Agreements.
2. Registration.
a. Mandatory Registration. The Company shall prepare, and, as
soon as practicable but in no event later than thirty (30) days after the
Initial Closing Date (the "Filing Deadline"), file with the SEC a Registration
Statement on Form S-3 covering the resale of all of the Registrable Securities.
In the event that Form S-3 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration, subject to
the provisions of Section 2(d). The Registration Statement prepared pursuant
hereto shall register for resale at least 7,028,009 shares of Common Stock. The
Company shall use its reasonable best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than
the date which is one hundred eighty (180) days after the Initial Closing Date
(the "Effectiveness Deadline").
b. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor's Registrable Securities, each transferee shall be allocated the
portion of the then remaining number of Registrable Securities included in such
Registration Statement allocable to the transferor. In no event shall the
Company include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of Buyers holding at
least 60% of the Registrable Securities.
c. Legal Counsel. Subject to Section 5 hereof, the Buyers holding
at least 60% of the Registrable Securities shall have the right to select one
legal counsel to review
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and comment upon any registration pursuant to this Section 2 ("Legal Counsel"),
which shall be Xxxxxxx Xxxx & Xxxxx LLP or such other counsel as thereafter
designated in writing by the holders of at least 60% of the Registrable
Securities.
d. Ineligibility for Form S-3. In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the holders of
at least 60% of the Registrable Securities and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.
e. Sufficient Number of Shares Registered. In the event the
number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement or an Investor's allocated portion
of the Registrable Securities pursuant to Section 2(b), the Company shall amend
the Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover at least 105%
of the number of such Registrable Securities as of the trading day immediately
preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity therefor arises. The Company shall use its
reasonable best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof. The calculation of the number of shares sufficient to cover all of the
Registrable Securities shall be made without regard to any limitations on the
conversion of the Convertible Debentures or the exercise of the Warrants, and
such calculation shall assume that the Convertible Debentures and the Warrants
are then convertible into shares of Common Stock at the then prevailing
Conversion Rate (as defined in the Convertible Debentures) or Warrant Exercise
Price (as defined in the Warrants), as applicable.
f. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
covering all the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the Filing Deadline or (B) not declared effective by
the SEC on or before the Effectiveness Deadline or (ii) on any day after such
Registration Statement has been declared effective by the SEC sales of all the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as defined in
Section 3(p)) pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement or to register sufficient shares of Common Stock),
then, as partial relief for the damages to any holder by reason of any such
delay in or reduction of its ability to sell the underlying shares of Common
Stock (which remedy shall not be exclusive of any other remedies available at
law or in equity), the Company shall pay to each holder of Convertible
Debentures relating to such Registration Statement an amount in cash equal to
the product of (i) the Initial
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Outstanding Principal Amount (as such term is defined in the Convertible
Debentures) paid by such Investor for its Convertible Debentures multiplied by
(ii) the product of (I) 0.0004166 multiplied by (II) the sum of (x) the number
of days after the Filing Deadline that the Registration Statement is not filed
with the SEC, plus (y) the number of days after the Effectiveness Deadline that
the Registration Statement is not declared effective by the SEC, plus (z) the
number of days after the Registration Statement has been declared effective by
the SEC that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of all the Registrable Securities required
to be included on such Registration Statement. The payments to which a holder
shall be entitled pursuant to this Section 2(f) are referred to herein as
"Registration Delay Payments." Registration Delay Payments shall be paid on the
earlier of (I) the last day of the calendar month during which such Registration
Delay Payments are incurred and (II) the third Business Day after the event or
failure giving rise to the Registration Delay Payments is cured. In the event
the Company fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full.
3. Related Obligations.
At such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will
use its reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities (but in no
event later than the applicable Filing Deadline) and use its reasonable best
efforts to cause such Registration Statement relating to the Registrable
Securities required to be covered thereby to become effective as soon as
practicable after such filing (but in no event later than the applicable
Effectiveness Deadline). The Company shall, subject to the terms of this
Agreement, keep each Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the date as of which the Investors may sell
all of the Conversion Shares covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (the "Registration
Period"), which Registration Statement, as of its filing date, (including any
amendments or supplements thereto and prospectuses contained therein, as of
their respective filing dates) 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, in light of the circumstances in which
they were made, not misleading. The term "reasonable best efforts" shall mean,
among other things, that the Company shall submit to the SEC, within five (5)
Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on the Registration Statement, as the case may be, and
the approval of Legal Counsel pursuant to Section 3(c), a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request.
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b. Subject to Section 3(p), the Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act applicable
to the Company with respect to the disposition of all Registrable Securities
covered by such Registration Statement until such time as all of such
Registrable Securities shall 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 case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.
c. The Company shall permit Legal Counsel to review and comment
upon (i) a Registration Statement at least three (3) Business Days prior to its
filing with the SEC and (ii) all other Registration Statements and all
amendments and supplements thereto (except for Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar
or successor reports or other documents incorporated by reference therein)
within a reasonable number of days prior to their filing with the SEC. The
Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements (but excluding all
schedules, all documents incorporated therein by reference, and all exhibits,
unless requested in writing by Legal Counsel) and (iii) upon the effectiveness
of any Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto. The Company
agrees that it will, and it will cause its counsel to, consider in good faith
any comments or objections from Legal Counsel as to the form or content of any
Registration Statement or amendments or supplements thereto or any request for
acceleration of the effectiveness of any Registration Statement or any amendment
or supplement thereto.
d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements (but excluding all schedules, all documents incorporated therein by
reference and all exhibits, unless requested in writing by Legal Counsel) and
each preliminary prospectus, (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request) and (iii) such other documents,
including copies of any preliminary or final
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prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.
e. Subject to Section 3(p), the Company shall use its reasonable
best efforts to (i) register and qualify, unless an exemption from registration
and qualification applies, the resale by Investors of the Registrable Securities
covered by the Registration Statement under such other securities or "blue sky"
laws of all applicable jurisdictions in the United States as any holder of
Registrable Shares reasonably requests in writing, (ii) 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 during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
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 (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
f. Notwithstanding anything to the contrary set forth herein, as
promptly as practicable after becoming aware of such event, the Company shall
notify Legal Counsel and each Investor in writing of the happening of any event,
of which the Company has knowledge, as a result of which the prospectus included
in a 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, in light of the
circumstances under which they were made, not misleading (provided that in no
event shall such notice contain any material, nonpublic information), and,
subject to Section 3(p), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
ten (10) copies of such supplement or amendment to Legal Counsel and each
Investor (or such other number of copies as Legal Counsel or such Investor may
reasonably request). The Company shall also promptly notify Legal Counsel and
each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
on the same day of such effectiveness and by overnight mail), (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
g. Subject to Section 3(p), the Company shall use its reasonable
best efforts to (i) prevent the issuance of any stop order or other suspension
of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities
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for sale in any jurisdiction and, (ii) if such an order or suspension is issued,
to obtain the withdrawal of such order or suspension at the earliest practicable
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
h. The Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents
retained by the Investors (collectively, the "Inspectors"), at the offices where
normally kept and during reasonable business hours, 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 Inspector shall agree in writing to hold in strict confidence and
shall not make any disclosure (except to an Investor) or use 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, 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 under the 1933
Act, (b) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of competent
jurisdiction, 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 of which the Inspector has knowledge. Each Investor 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 (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations and the terms and
provisions of this Agreement.
i. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
j. The Company shall use its reasonable best efforts either to
(i) cause all the Registrable Securities covered by a Registration Statement to
be listed on each securities exchange on which securities of the same class or
series issued by the Company are
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then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure designation and
quotation of all the Registrable Securities covered by a Registration Statement
on The Nasdaq National Market, or (iii) if, despite the Company's reasonable
best efforts to satisfy the preceding clause (i) or (ii), the Company is
unsuccessful in satisfying the preceding clause (i) or (ii), to secure the
inclusion for quotation on The Nasdaq SmallCap Market for such Registrable
Securities and, without limiting the generality of the foregoing, to use its
reasonable best efforts to arrange for at least two market makers to register
with the National Association of Securities Dealers, Inc. ("NASD") as such with
respect to such Registrable Securities. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).
k. In connection with any sale or transfer of Registrable
Securities pursuant to a Registration Statement, the Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the
extent applicable, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and, registered in such names as the Investors
may request and if such certificates are to be issued in the name of a Person
other than the registered holder of such Registrable Securities, then the
Investor shall give the Company notice at least two Business Days prior to any
sale of the Registrable Securities.
l. If requested by an Investor, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
to the Registration Statement such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of
Registrable Securities to which the Company does not reasonably object,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable make all required filings of
such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any Registration Statement if reasonably requested by an Investor holding any
Registrable Securities and to which the Company does not reasonably object.
m. 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, and in the manner provided by, the provisions of Rule 158 under the 0000
Xxx) covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement.
n. The Company shall otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
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o. Within two (2) Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.
p. Notwithstanding anything to the contrary herein, at any time
after the Registration Statement has been declared effective by the SEC, the
Company may delay the disclosure of material non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
judgment of the Board of Directors of the Company, in the best interest of the
Company (a "Grace Period"); provided, that the Company shall promptly (i) notify
the Investors in writing of the existence of material non-public information
giving rise to a Grace Period (provided that in each notice the Company will not
disclose the content of such material non-public information to the Investors)
and the date on which the Grace Period will begin, and (ii) notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed thirty (30) consecutive days and during any
three hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of ninety (90) days and the first day of any Grace Period must be at
least two (2) trading days after the last day of any prior Grace Period (an
"Allowable Grace Period"). For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) and shall end on and include the
later of the date the Investors receive the notice referred to in clause (ii)
and the date referred to in such notice. The provisions of Section 3(g) hereof
shall not be applicable during the period of any Allowable Grace Period. Upon
expiration of the Grace Period, the Company shall again be bound by the first
sentence of Section 3(f).
4. Obligations Of The Investors.
a. At least seven (7) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor 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 effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. Each Investor shall promptly
notify the Company of any material change with respect to such information
previously provided to the Company by such Investor.
b. Each Investor, by such Investor'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 any
Registration Statement hereunder, unless such
10
Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g),
Section 3(p) or the first sentence of 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
3(g) or the first sentence of 3(f) or receipt of notice that no supplement or
amendment is required and, if so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies (other than a single
file copy, which such Investor may keep) in such Investor's possession of the
prospectus covering such Securities current at the time of receipt of such
notice. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreements,
the Convertible Debenture and/or the Warrant, as applicable, in connection with
any sale of Registrable Securities with respect to which an Investor has entered
into a contract for sale prior to the Investor's receipt of a notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f) and for which the Investor has not yet settled.
5. Expenses Of Registration.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $20,000
for the Registration Statement. In addition, the Company shall pay all of the
Investors' reasonable costs (including legal fees) incurred in connection with
the successful enforcement of the Investors' rights hereunder.
6. Indemnification.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys' fees, amounts paid in settlement or expenses, joint or several,
(collectively, "Claims") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or
11
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an indemnified party is or may be
a party thereto ("Indemnified Damages"), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are offered
("Blue Sky Filing"), or the omission or alleged omission to state a material
fact required to be stated therein 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, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 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 pursuant to a Registration Statement or
(iv) any material violation of this Agreement (the matters in the foregoing
clauses (i) through (iv) being, collectively, "Violations"). Subject to Section
6(c), the Company shall reimburse the Indemnified Persons, promptly as such
expenses are incurred and are due and payable, for any 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(a): (i) shall
not apply to a Claim by an Indemnified Person 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 for such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(d); (ii) with respect to any preliminary prospectus, shall not inure to the
benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 3(d), 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 or failed to deliver the correct
prospectus as required by the 1933 Act and such correct prospectus was timely
made available pursuant to Section 3(d); (iii) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver or to cause
to be delivered the prospectus made available by the Company, including a
corrected prospectus, if such prospectus or corrected prospectus was timely made
available by the Company pursuant to Section 3(d); and (iv) 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 or delayed. Such indemnity shall remain in full force
12
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 the Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "Indemnified Party"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
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 Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor 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 Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) 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.
c. Promptly after an Indemnified Person or Indemnified Party
under this Section 6 has knowledge of any Claim as to which such Indemnified
Person reasonably believes indemnity may be sought or promptly after such
Indemnified Person or Indemnified Party receives notice of the commencement of
any action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of such Claim, 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 an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between
13
such Indemnified Person or Indemnified Party and any other party represented by
such counsel in such proceeding. In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be selected by
the Investors holding at least 60% in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party as provided
herein shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
d. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
e. The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. 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 Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no person involved in the sale of Registrable Securities which
person is guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) in connection with such sale shall be entitled to
contribution from any person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii) contribution by any
seller of Registrable Securities shall be limited in
14
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities pursuant to such Registration Statement.
8. Reports Under The 1934 Act.
With a view to making available to the Investors the benefits of
Rule 144 promulgated under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its reasonable best efforts to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 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(c) of the
Securities Purchase Agreements) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the applicable reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and copies of such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9. Assignment of Registration Rights.
The rights under this Agreement shall be automatically assignable by
the Investors to any transferee of all or any portion of such Investor's
Registrable Securities if: (i) the Investor 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; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) 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
with the Company to be bound by all of the provisions contained herein; (v) such
transfer shall have been made in accordance with the applicable requirements of
the Securities Purchase Agreements, the Convertible Debentures and the Warrants;
(vi) such transfer shall have been conducted in accordance with all applicable
federal and state securities laws; and (vii) such transfer or assignment does
not result in more than ten (10) holders of Registrable Securities (excluding
transfers to up to three (3) affiliates of such
15
holder which shall count only as one transfer) and, after giving effect to such
transfer or assignment, such assignee or transferee holds at least 10% of the
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations, recapitalizations and other similar transactions)
or such lesser number if such transfer involves all of the Registrable
Securities then held by such transferor.
10. 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 the written consent of the Company
and Investors who then hold at least 60% of the Registrable Securities, except,
with respect to amendments or waivers to the definition of Registrable
Securities, Section 11(d) and this Section 10, such written instrument shall be
signed by the Company and the holders of at least 90% of the outstanding
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities or to the extent that such amendment
or waiver treats any holder disproportionately from any other holder. No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
11. Miscellaneous.
a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable Securities.
b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
RSA Security Inc.
00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
16
With a copy to:
RSA Security Inc.
00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
and
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
If to Legal Counsel:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
c. 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.
d. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of
17
the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York.
Each party hereby irrevocably submits to the non-exclusive jurisdiction of the
state and federal courts sitting the City of New York, borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
e. This Agreement, the Securities Purchase Agreements, the
Warrants, the Convertible Debentures and the documents referenced herein and
therein 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 Securities Purchase Agreements, the Warrants and
the Convertible Debentures supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
The Registration Rights Agreement is hereby terminated and superceded in its
entirety by this Agreement.
f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical 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 parties hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
i. 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
18
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.
j. All consents and other determinations required to be made by
the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding at least 60% (or 90%, to the
extent expressly required in this Agreement) of the Registrable Securities,
determined as if all of the Convertible Debentures held by Investors then
outstanding have been converted into Registrable Securities and all Warrants
then outstanding have been exercised for Registrable Securities without regard
to any limitations on conversion of the Convertible Debentures or on exercise of
the Warrants.
k. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
l. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
19
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
RSA SECURITY INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx Xxxxxxxx, Xx.
Its: President and CEO
[Signatures of Buyers on Following Page]
20
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
BUYERS:
PORTSIDE GROWTH AND OPPORTUNITY FUND
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
-------------------------------
Title: Managing Officer
------------------------------
XXXXXXXX, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
-------------------------------
Title: Managing Officer
------------------------------
RCG LATITUDE MASTERFUND, LTD.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
-------------------------------
Title: Managing Officer
------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
-------------------------------
Title: VP
------------------------------
21
SCHEDULE OF BUYERS
Investor's Name, Representative, Principal Amount
Address for Notices of
and Facsimile Number Debentures Number of Warrants
------------------------------- ------------------------------- -------------------------------
Portside Growth and Opportunity Fund $18,750,000 204,620
Xxxxxxxx, L.P. $49,500,000 540,196
RCG Latitude Masterfund, Ltd $1,750,000 19,098
Total
General Electric Capital Corporation $10,000,000 109,131(1)
Total $80,000,000 873,045
=========== =======
All Notices to Portside, Xxxxxxxx and RCG to be sent to:
c/o AG Ramius Partners, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
(000) 000-0000
with a copy to:
c/o AG Ramius Partners, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Xxxx Xxxx
(000) 000-0000
All Notices to GE Capital to be sent to:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
---------------------
(1) Warrant to be transferred to GE Capital Equity Investments, Ltd.
immediately following execution of this Agreement.
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
EquiServe LLP
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Re: RSA Security Inc.
Ladies and Gentlemen:
We are counsel to RSA Security Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "Purchase Agreement") entered into by and
among the Company and the buyers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders shares of its 7% Convertible
Debentures, (the "Convertible Debentures") convertible into shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock") and
warrants exercisable for shares of its Common Stock (the "Warrants"). Pursuant
to the Purchase Agreement, the Company also has entered into a Registration
Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant
to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Convertible Debentures
and exercise of the Warrants under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ___, 200_, 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 each of the Holders as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF HOLDERS]
INDEX OF TERMS
Page
1933 Act.......................................................................................................... 1
1934 Act.......................................................................................................... 6
Additional Buyers................................................................................................. 1
Additional Conversion Shares...................................................................................... 2
Additional Convertible Debentures................................................................................. 1
Additional Securities Purchase Agreement.......................................................................... 1
Additional Warrant Shares......................................................................................... 2
Additional Warrants............................................................................................... 2
Agreement......................................................................................................... 1
Allowable Grace Period............................................................................................ 10
Blue Sky Filing................................................................................................... 12
Business Day...................................................................................................... 2
Buyer............................................................................................................. 1
Buyers............................................................................................................ 1
Claims............................................................................................................ 11
Common Stock...................................................................................................... 1
Company........................................................................................................... 1
Conversion Shares................................................................................................. 2
Convertible Debentures............................................................................................ 1
Effectiveness Deadline............................................................................................ 3
Filing Deadline................................................................................................... 3
Grace Period...................................................................................................... 10
Indemnified Damages............................................................................................... 11
Indemnified Party................................................................................................. 13
Indemnified Person................................................................................................ 11
Initial Buyers.................................................................................................... 1
Initial Closing Date.............................................................................................. 2
Initial Conversion Shares......................................................................................... 1
Initial Convertible Debentures.................................................................................... 1
Initial Securities Purchase Agreements............................................................................ 1
Initial Warrant Shares............................................................................................ 1
Initial Warrants.................................................................................................. 1
Inspectors........................................................................................................ 8
Investor.......................................................................................................... 2
Legal Counsel..................................................................................................... 3
NASD.............................................................................................................. 9
October 17, 2001 Securities Purchase Agreement.................................................................... 1
October 29, 2001 Securities Purchase Agreement.................................................................... 1
Person............................................................................................................ 2
Records........................................................................................................... 8
Register.......................................................................................................... 2
Registrable Securities............................................................................................ 3
Registration Delay Payments....................................................................................... 5
Registration Period............................................................................................... 5
Registration Rights Agreement..................................................................................... 1
Registration Statement............................................................................................ 3
Rule 144.......................................................................................................... 14
Rule 415.......................................................................................................... 2
SEC............................................................................................................... 2
Securities Purchase Agreements.................................................................................... 1
Violations........................................................................................................ 12
Warrant Shares.................................................................................................... 2
Warrants.......................................................................................................... 2
