REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into this 12th day of May, 2000, by and between Sync Research, Inc., a Delaware
corporation (the "Company") and Entrada Holdings LLC (the "Purchaser").
This Agreement is made pursuant to a Stock Purchase Agreement, dated as of
May__, 2000 (the "Purchase Agreement") between the Company and the Purchaser. In
order to induce the Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to closing under the
Purchase Agreement. All defined terms used but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Act" means Securities Act of 1933, as amended.
"Commission" means Securities and Exchange Commission.
"Common Stock" means Common Stock, $.001 par value per share, of the
Company.
"Exchange Act" means Securities Exchange Act of 1934, as amended.
"Holders" is defined in Section 2(b) hereof.
"NASD" means National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means prospectus included in the Registration Statement (as
defined herein), as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Transfer Restricted
Securities (as defined herein) covered by the Registration Statement and by all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material which may be incorporated by reference into such
Prospectus.
"Registrable Date" means the earlier of: (i) ninety (90) days after the
closing of the Osicom Merger (as defined in the Purchase Agreement) or (ii) the
first anniversary of the date of this Agreement.
"Transfer Restricted Securities" means each share of the Company's Common
Stock issued or issuable upon the conversion of the shares of Preferred Stock
issued pursuant to the Purchase Agreement) and any other shares of Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
shares of Common Stock, until each such share (i) has been effectively
registered under the Act, or (ii) is distributed to the public pursuant to Rule
144 under the Act or (iii) may be sold or transferred pursuant to Rule 144(k)(or
any similar provisions then in force) under the Act or otherwise.
"Underwriter" means any underwriter, placement agent, selling broker,
dealer manager, qualified independent underwriter or similar securities industry
professional.
"Underwritten Registration or Underwritten Offering" means an offering in
which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm commitment
or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3 REGISTRATION
(a) Registration on Demand.
(i) At any time after the Registrable Date the Purchaser on behalf
of the Holders of the Transfer Restricted Securities shall have the right to
require the Company, by written request, to cause the Transfer Restricted
Securities to be registered with the Commission by filing a Registration
Statement to cover the offer and resale by a Holder from time to time and the
methods of distribution elected by such holder of Transfer Restricted Securities
as set forth in such Registration Statement. Within 10 days after receipt of any
such request, the Company will serve a written notice of such registration
request to all Holders, and the Company will include in such registration all
Transfer Restricted Securities of such Holders with respect to which the Company
has received written requests for inclusion therein within 20 business days
after the delivery such notice. As used herein, "register", "registered" and
"registration" each refer to a registration of the Transfer Restricted
Securities effected by filing with the Commission a Registration Statement in
compliance with the Act and the declaration or ordering by the Commission of
effectiveness of such Registration Statement. "Registration Statement" shall
mean Form S-3 or such other form as may be available to the Company and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
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reference therein. In connection with any registration, the Company will pay for
all registration expenses (as defined in Section 5 hereof) and will pay for its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed.
(ii) A registration will not be deemed to have been effected
pursuant to this Section 3(a) unless it has been declared effective by the
Commission and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided that if, after
it has become effective, the offering of shares of Transfer Restricted
Securities pursuant to such registration is or becomes the subject of any stop
order, injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of the shares of Common Stock pursuant to the registration at
any time within the time period provided under Section 4(b)(ii)(y), such
registration will be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 3(a) is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 3(a) does not remain
effective for a period of at least the period provided under Section
4(b)(ii)(y), then the Company shall continue to be obligated to effect such
registration pursuant to this Section 3(a).
(b) Incidental Registration. If the Company at any time proposes to
register (other than a registration on Form S-8 or S-4 or any successor or
similar forms) any of its equity securities under the Act, whether or not for
sale for its own account, in a manner which would permit registration of
Transfer Restricted Securities for offer or resale under the Act, it will each
such time use its best efforts to effect the registration under the Act of all
Transfer Restricted Securities held by the Holders; provided, however, that (i)
if such registration involves an Underwritten Offering, the Holders
participating in the Underwritten Offering, if requested by an Underwriter, must
sell their Transfer Restricted Securities to the Underwriters selected by the
Company on the same terms and conditions as apply to the Company; and (ii) if,
(x) at any time after giving written notice of its intention to register any
securities pursuant to this Section 3(b) and (y) prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company shall give written notice to all Holders of Transfer Restricted
Securities and, thereupon, shall be relieved of its obligation to register any
Transfer Restricted Securities in connection with such proposed registration.
Notwithstanding the foregoing, the Holders shall have the absolute right in
their sole discretion not to participate in any Underwritten Offering in the
event that the terms or conditions of such offering are not satisfactory.
(i) If a registration pursuant to Section 3(b) involves an
Underwritten Offering and the managing Underwriter advises the Company in
writing that, in its opinion, the number of equity securities (including all
Transfer Restricted Securities) which the Company, the Holders and any other
Persons intend to include in such registration exceeds the largest number of
securities that can be sold without having an adverse effect on such offering,
including the price at which such securities can be sold, the Company will
include in such registration (x) first, all the securities the Company proposes
to sell for its own account, and (y) second, to the extent
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that the number of securities that the Company proposes to sell for its own
account pursuant to Section 3(b) hereof is less than the number of equity
securities that the Company has been advised can be sold in such offering
without having the adverse effect referred to above, all Transfer Restricted
Securities requested to be included in such registration by the Holders pursuant
to Section 3(b) hereof (provided that if the number of Transfer Restricted
Securities requested to be included in such registration by the Holders pursuant
to Section 3(b) hereof, together with the number of Transfer Restricted
Securities to be included in such registration pursuant to clause (x) of this
Section 3(b)(i), exceeds the number that the Company has been advised can be
sold in such offering without having the adverse effect referred to above, the
number of such Transfer Restricted Securities requested to be included in such
registration by the Holders pursuant to Section 3(b)(i) hereof shall be limited
to such extent and shall be allocated pro rata among all such Holders on the
basis of the relative number of Transfer Restricted Securities then held by such
Holder) and all other Persons having similar registration rights with respect to
the Company's Common Stock.
(ii) In the event of an Underwritten Offering, upon the Company's
request, any Holder will execute and deliver a custody agreement and power of
attorney in form and substance reasonably satisfactory to the Holders with
respect to the Transfer Restricted Securities to be registered pursuant to this
Section 3(b) (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Holders will deliver to, and deposit in custody with, the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Transfer Restricted Securities (duly endorsed in blank by the
registered owner or owners thereof or accompanied by duly executed stock powers
in blank) and irrevocably appoint said custodian and attorney-in-fact as the
Holder's agent and attorney-in-fact with full power and authority to act under
the Custody Agreement and Power of Attorney on the Holder's behalf with respect
to the matters specified thereon. The Holders agree that they will execute such
other agreements as the Company may reasonably request to further evidence the
provision of this Section 3(b).
(c) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in any Registration Statement pursuant to this
Agreement unless such Holder furnishes to the Company in writing, within ten
(10) business days after receipt of a request therefor, such information related
to such Holder as the Company may reasonably request for use in connection with
any Registration Statement or Prospectus or preliminary Prospectus included
therein.
(d) Notwithstanding any other provision of Section 3(a), (A) if the
Company determines in the good faith judgment of the Company's counsel that the
filing of a Registration Statement would require the disclosure of material
information which the Company has a good faith business purpose for preserving
as confidential, the Company shall not be required to commence using its best
efforts to effect a registration pursuant to Section 3(a) until the earlier of
(i) the date upon which such material information is disclosed to the public (it
being understood that nothing herein shall require such disclosure) or ceases to
be material or (ii) 60 days after the Company makes such good faith
determination, (B) the Company shall have the right to defer the initial filing
or the effectiveness of a Registration Statement filed pursuant to Section 3(a)
hereof for a reasonable period of time to permit the Company to have prepared,
to the extent not
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already available, financial statements for the Company's most recently
completed fiscal period ended at the time that the demand for registration is
received by the Company, only to the extent that the Company, in consultation
with its regularly retained counsel and certified public accountants, determines
in good faith that the inclusion of such financial statements is desirable to
avoid the use of stale financial statements, and (C) the Company shall not be
obligated to effect more than two (2) registrations pursuant to Section 3(a).
The Company may impose stop-transfer instructions with respect to the Transfer
Restricted Securities of the Holders for any period of suspension of
effectiveness of the Registration Statement being filed pursuant to Section
3(a).
SECTION 4. REGISTRATION PROCEDURES
In connection with the Registration Statement, the Company will use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution or disposition thereof, and pursuant thereto the Company
will as expeditiously as possible:
(a) prepare, file and use its best efforts to cause to become effective a
registration statement under the Act regarding the Transfer Restricted
Securities to be offered; provided, however, that before filing a Registration
Statement or any Prospectus, or any amendments or supplements thereto (other
than documents incorporated by reference after the initial filing of the
Registration Statement), the Company will furnish to the Holders and the
Underwriter(s), if any, copies of all such documents proposed to be filed, and
the Company will not file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which (i) the Underwriter(s), if any,
shall reasonably object or (ii) the Holders of a majority of the Transfer
Restricted Securities to be registered in the Registration Statement shall
reasonably object, in each such case within ten (10) business days after the
receipt thereof. A Holder or Underwriter, if any, shall be deemed to have
reasonably objected to such filing if the Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed contains a
material misstatement or omission, which misstatement or omission is
specifically identified to the Company in writing within such ten (10) business
days;
(b) prepare and file with the Commission such amendments and supplements
to such Registration Statement and the Prospectus used in connection therewith
as may be necessary (i) to prevent the Registration Statement from containing
any material misstatement or omission and (ii) to keep such Registration
Statement effective and to comply with the provisions of the Act with respect to
the disposition of all Transfer Restricted Securities until the later of (x) the
disposition of all of the Transfer Restricted Securities covered by such
Registration Statement or (y) the expiration of three (3) years after such
Registration Statement becomes effective;
(c) use its best efforts to register or qualify all Transfer Restricted
Securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as the Holders or any Underwriter of such
Transfer Restricted Securities shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
or any Underwriter to consummate the disposition in such jurisdictions of its
Transfer Restricted Securities covered by such Registration Statement;
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(d) advise the Underwriter(s), if any, and selling Holders promptly and,
if requested by such Persons, to confirm such advice in writing, (i) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective, (ii) of any request by
the Commission for amendments to the Registration Statement or any amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and (iv) of the
existence of any fact and the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or blue sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(e) in the case of any Underwritten Offering, furnish to the Holders and
the Underwriters, addressed to them, (A) an opinion of counsel for the Company,
dated the date of the closing under the underwriting agreement relating to any
Underwritten Offering, and (B) a comfort letter signed by the independent public
accountants who have certified the Company's financial statements included in
such Registration Statement, covering substantially the same matters with
respect to such Registration Statement (and the Prospectus included therein)
and, in the case of such accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters, respectively, delivered to
underwriters in underwritten public offerings of securities;
(f) promptly following the filing of any document that is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement), provide copies of such
document to the Holders;
(g) deliver to each Holder and each of the Underwriter(s), if any, without
charge, as many copies of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Persons may reasonably request;
the Company consents to the use of the Prospectus and any amendment or
supplement thereto by each of the Holders and each of the Underwriter(s), if
any, in connection with the public offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or supplement
thereto;
(h) comply with all applicable rules and regulations of the Commission,
including Section 11(a) of the Securities Act and Rule 158 of the Securities
Act, and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement (which need not be audited) for
the twelve-month period (i) commencing at the end of any fiscal quarter
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in which Transfer Restricted Securities are sold to Underwriters in a firm or
best efforts Underwritten Offering or (ii) if not sold to Underwriters in such
an offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement;
(i) make all filings required to be made with the NASD and in the
performance of any due diligence investigation by any Underwriter (including any
"qualified independent Underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD);
(j) cooperate with the Holders and the Underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the Underwriter(s),
if any, may request at least two business days prior to any sale or Transfer
Restricted Securities made by such Underwriter(s);
(k) if any fact or event contemplated by clause (d)(iv) above shall exist
or have occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading; and
(l) cause all Transfer Restricted Securities covered by the Registration
Statement to be listed on each securities exchange or quotation system on which
similar securities issued by the Company are then listed, if any;
Each Holder as to which any Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
Each Holder agrees by acquisition of such Transfer Restricted Securities
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 4(d)(iv) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities until such Holder's
receipt of the copies of the supplemented or amended Prospectus, or until it is
advised in writing (the "Advice") by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus. If so directed by
the Company, each Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Transfer Restricted Securities current at the
time of receipt of such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of the Registration
Statement set forth in Section 4(b) hereof shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4(d) hereof to and including the date when each
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selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus or shall have received the
Advice.
SECTION 5. REGISTRATION EXPENSES
Except as otherwise specifically set forth herein, all expenses incident
to the Company's performance of or compliance with this Agreement will be borne
solely by the Company, regardless whether a Registration Statement becomes
effective, including without limitation:
(i) all registration and filing fees and expenses (including filings
made with the NASD);
(ii) fees and expenses of compliance with federal securities or state
blue sky laws;
(iii) expenses of printing (including, without limitation, expenses of
printing or engraving certificates for the Transfer Restricted Securities in a
form eligible for deposit with Depository Trust Company and of printing
Prospectuses), messenger and delivery service and telephone;
(iv) reasonable fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified public accountants
of the Company (including the expenses of any special audit and "cold comfort"
letters required by or incident to such performance);
(vi) fees and expenses associated with any NASD filing required to be made
in connection with the Registration Statement, including, if applicable, the
fees and expenses of any "qualified independent Underwriter" (and its counsel)
that is required to be retained in accordance with the rules and regulations of
the NASD; and
(vii) the Company's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees of any rating
agency (collectively, the "registration expenses").
The expense of any broker's commission or Underwriters' discount or
commission in connection with the sale of Transfer Restricted Securities shall
be borne by the Holder of such Transfer Restricted Securities.
SECTION 6. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder (each
such Holder an "Indemnified Holder") and in the case of an Underwritten
Offering, each Underwriter participating in the distribution (each such
Underwriter an "Indemnified Underwriter"), each officer and director of each
Holder and each person that controls each Indemnified Holder or Indemnified
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and agents, employees, officers and directors or any such
controlling person of any Indemnified Holder or Indemnified Underwriter from and
against any and all losses, claims,
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damages, judgments, liabilities and expenses (including the reasonable fees and
expenses of counsel and other expenses in connection with investigating,
defending or settling any such action or claim) as they are incurred arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary Prospectus or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except (i) the Company shall not be liable to any such Indemnified Holder or
Indemnified Underwriter in any such case insofar as such losses, claims,
damages, judgments, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to such Indemnified Holder or Indemnified Underwriter
furnished in writing by such Indemnified Holder or Indemnified Underwriter to
the Company expressly for use therein and (ii) the Company shall not be liable
to any such Indemnified Holder or Indemnified Underwriter under the indemnity
agreement in this Section 6(a) with respect to any preliminary Prospectus to the
extent that any such loss, claim, damage, judgment, liability or expense (x)
arises out of or is based upon an untrue statement or omission in such
prospectus and (y) such untrue statement or omission is corrected in an
amendment or supplement to such prospectus, and (z) having previously been
furnished by or on behalf of the Company with sufficient copies of such
prospectus as so amended or supplemented, such Indemnified Holder or Indemnified
Underwriter thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale of a person asserting the
claim from which such loss, claim, damages, judgments, liabilities or expenses
arise.
(b) If any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any
Indemnified Holder or Indemnified Underwriter with respect to which indemnity
may be sought against the Company pursuant to Section 6(a), such Indemnified
Holder or Indemnified Underwriter shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Holder or
Indemnified Underwriter and payment of all fees and expenses; provided, however,
that the omission so to notify the Company shall not relieve the Company from
any liability that they may have to any Indemnified Holder or Indemnified
Underwriter (except to the extent that the Company is materially prejudiced or
otherwise forfeits substantive rights or defenses by reason of such failure). An
Indemnified Holder or Indemnified Underwriter shall have the right to employ
separate counsel in any such action or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder or Indemnified Underwriter unless (i) the
Company agrees in writing to pay such fees and expenses, (ii) the Company has
failed promptly to assume the defense and employ counsel satisfactory to the
Indemnified Holder or Indemnified Underwriter or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both the
Indemnified Holder or Indemnified Underwriter, on the one hand, and the Company
and such Indemnified Holder or Indemnified Underwriter shall have been advised
in writing by its counsel that representation of it and the Company by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation has been
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proposed) due to actual or potential conflicts of interests between them (in
which case the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Holder or Indemnified Underwriter). The
Company shall not be liable for any settlement of any such action effected
without the written consent of the Company, but if settled with the written
consent of the Company, or if there is a final judgment with respect thereto,
the Company agrees to indemnify and hold harmless each Indemnified Holder or
Indemnified Underwriter from and against any loss or liability by reason of such
settlement or judgment. The Company shall not, without the prior written consent
of each Indemnified Holder or Indemnified Underwriter affected thereby, effect
any settlement of any pending or threatened proceeding in which such Indemnified
Holder or Indemnified Underwriter has sought indemnity hereunder, unless such
settlement includes an unconditional release of such Indemnified Holder or
Indemnified Underwriter from all liability arising out of such action, claim,
litigation or proceeding. For the purposes of this Section 6(b), the term
"conflict of interest" shall mean that there are one or more legal defenses
available to the Indemnified Holder or the Company, as applicable, which
different or additional defenses make joint representation inappropriate.
(c) Each Indemnified Holder and Indemnified Underwriter agrees to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "Company Indemnified Parties") to the same extent as the
foregoing indemnity from the Company to such Indemnified Holder or Indemnified
Underwriter, but only with respect to information relating to such Indemnified
Holder or Indemnified Underwriter furnished to the Company in writing by such
Indemnified Holder or Indemnified Underwriter, respectively, expressly for use
in the Registration Statement, Prospectus (or any amendment of supplement
thereto), or any preliminary Prospectus. In case any action shall be brought
against any Company Indemnified Party based on the Registration Statement,
Prospectus (or any amendment of supplement), or any preliminary Prospectus and
in respect of which indemnification may be sought against each Indemnified
Holder and Indemnified Underwriter pursuant to this Section 6(c), such
Indemnified Holder and Indemnified Underwriter shall have the rights and duties
given to the Company by Section 6(a) (except that if the Company shall have
assumed the defense thereof, such Indemnified Holder and Indemnified Underwriter
may, but shall not be required to employ separate counsel therein and
participate in the defense thereof and the fees and expenses of such counsel
shall be at the expense of such Indemnified Holder or Indemnified Underwriter)
and the Company Indemnified Parties shall have the rights and duties given to
the Indemnified Holders or Indemnified Underwriters by Section 6(b). In no event
shall the liability of any Indemnified Holder hereunder be greater in amount
than the dollar amount of the net proceeds (after broker's commissions or
underwriters discounts and commissions) received by such Indemnified Holder upon
the sale of the Transfer Restricted Securities giving rise to such
indemnification obligation.
(d) If the indemnification provided for in this Section 6 is unavailable
to any party entitled to indemnification pursuant to Section 6(a) or 6(c), then
such indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, judgments, liabilities and expenses in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and each Indemnified Holder or Indemnified Underwriter on the other in
connection with the
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statements or omissions which resulted in such losses, claims, damages,
judgments, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and each
Indemnified Holder and Indemnified Underwriter on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
by each Indemnified Holder and Indemnified Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. In no event shall the liability
of any Indemnified Holder hereunder be greater in amount than the dollar amount
of the net proceeds (after broker's commissions or underwriters discounts and
commissions) received by such Indemnified Holder upon the sale of the Transfer
Restricted Securities giving rise to such contribution obligation.
(e) The Company and each Indemnified Holder and Indemnified Underwriter
agree that it would not be just and equitable if contribution pursuant to
Section 6(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not found guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 6
are in addition to any liability that any indemnifying party may otherwise have
to any indemnified party.
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements. In
addition to the foregoing, all Holders agree that in connection with the first
Underwritten Offering following the date hereof, they shall not, to the extent
requested by the Company and the lead Underwriter in such offering, sell or
otherwise transfer or dispose of any Transfer Restricted Securities (other than
(i) sales, transfers or dispositions to donees who agree to be similarly bound
or (ii) sales, transfers or dispositions of Transfer Restricted Securities
included in the registration of the first Underwritten Offering or in any
registration statement previously declared effective) during a reasonable and
customary period of time, not to exceed 180 days, next following the effective
date of the Registration Statement relating to the first Underwritten Offering;
provided, however, that such agreement by the Holders not to dispose of Transfer
Restricted Securities during such period shall apply only if all executive
officers, directors and each stockholder holding at least 5% of the Common Stock
of the Company then
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outstanding and all other persons with registration rights relating to any of
the Company's securities to be registered in such offering (whether or not
pursuant to this Agreement) enter into similar agreements with the Company and
the Underwriters containing the same terms as set forth in this Section 7. In
order to enforce the foregoing covenant contained in the prior sentence, the
Company may impose stop-transfer instructions with respect to the Transfer
Restricted Securities of the Holders until the end of such agreed upon period.
SECTION 8. MISCELLANEOUS
(a) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders or Transfer Restricted Securities hereunder do
not in any way conflict with and are not inconsistent with the rights granted to
the Holders of the Company's securities under any other agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Holders holding
a majority of the Transfer Restricted Securities.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile transmission, or
air courier guaranteeing overnight delivery;
(i) if to a Holder of Transfer Restricted Securities, at the address
set forth on the records of the Company's registrar, with a copy to:
Entrada Holdings LLC
x/x Xxxxxxxx Xxxxxxxx Xxxxxxx Xxxx.
0000 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
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(ii) if to the Company, initially at its address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section, with a copy to:
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Any notice, demand or request required or permitted to be given by any
party to any other party pursuant to the terms of this Agreement shall be in
writing and shall be deemed given (i) when delivered personally or by verifiable
facsimile transmission (with an original to follow) on or before 5:00 p.m.,
California time, on a business day or, if such day is not a business day, on the
next succeeding business day, (ii) on the next business day after timely
delivery to a nationally-recognized overnight courier and (iii) on the third
business day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid).
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder of Transfer Restricted Securities unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder in accordance with the provisions of the Purchase Agreement.
Notwithstanding any assignment by the Purchaser of this Agreement, the Purchaser
shall remain the entity which pursuant to Section 3(a) has the right to require
the Company by written request to cause the Transfer Restricted Securities to be
registered pursuant to the terms of Section 3(a) unless the Purchaser expressly
agrees otherwise in a written instrument executed by the Purchaser.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law; Jurisdiction. This Agreement shall be governed by and
construed under the laws of the State of California without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the State
of California, 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 nor personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is
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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 in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SYNC RESEARCH, INC.
By:
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Name:
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Title:
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ENTRADA HOLDINGS LLC
By:
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Name:
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Title:
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