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EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of September
9, 1999, by and among GENERAL MAGIC, INC., a Delaware corporation, with
headquarters located at 000 X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 (the
"COMPANY"), and the undersigned Holders (each, a "HOLDER" and collectively, the
"HOLDERS").
WHEREAS:
A. In connection with the Exchange Agreement by and among the parties
of even date herewith (the "EXCHANGE AGREEMENT"), the Company has agreed, upon
the terms and subject to the conditions of the Exchange Agreement, to exchange
shares of the Company's Series D Convertible Preferred Stock (the "SERIES D
PREFERRED SHARES"), which are convertible into shares of the Company's Common
Stock, par value $.001 per share (the "COMMON STOCK") (as converted and held by
the Investors, the "SERIES D CONVERSION SHARES"), for shares of a newly created
series of preferred stock designated Series F Convertible Preferred Stock (the
"SERIES F PREFERRED SHARES"), which will be convertible into shares of the
Company's Common Stock (as converted and held by the Investors, the "SERIES F
CONVERSION SHARES"), in accordance with the terms of the Company's Certificate
of Designations, Preferences and Rights of Series F Convertible Preferred Stock
(the "CERTIFICATE OF DESIGNATIONS"); and
B. In connection with the Securities Purchase Agreement by and among
the Company, the Holders and certain other signatories thereto, dated March 30,
1999 (the "SECURITIES PURCHASE AGREEMENT"), the Company agreed, among other
things, to issue to the Holders warrants to acquire shares of Common Stock (as
issued to a Holder, the "WARRANTS") (the shares of Common Stock issuable upon
exercise of the Warrants are referred to herein as the "WARRANT SHARES"); and
C. To induce the Holders to execute and deliver the Exchange Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "1933 ACT"), and applicable
state securities laws:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Holders hereby agree as follows:
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1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
a. "INVESTOR" means a Holder and any transferee or assignee thereof
to whom a Holder assigns its rights under this Agreement in accordance with
Section 9 and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9.
b. "PERSON" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements 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
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").
d. "REGISTRABLE SECURITIES" means the Series D Conversion Shares,
the Series F Conversion Shares and the Warrant Shares issued or issuable upon
conversion of the Series D Preferred Shares or the Series F Preferred Shares or
the exercise of the Warrants, as the case may be, the Registration Delay Payment
Shares (as defined in Section 2(h)) and any shares of capital stock issued or
issuable with respect to the Series D Conversion Shares, the Series F Conversion
Shares, the Series D Preferred Shares, the Series F Preferred Shares, the
Warrant Shares, the Warrants or the Registration Delay Payment Shares as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, regardless of any limitation on conversions of Series D
Preferred Shares or the Series F Preferred Shares or on exercise of the
Warrants; provided, however, that the term Registrable Securities, Series D
Conversion Shares and Warrant Shares shall not include any security which has
been included on a Registration Statement that has been declared effective by
the SEC and which was not filed pursuant to this Agreement.
e. "REGISTRATION STATEMENT" means a registration statement of the
Company filed under the 1933 Act.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare, and, as soon
as practicable but in no event later than 60 days after the Issuance Date (as
defined in the Certificate of Designations), file with the SEC a Registration
Statement or Registration Statements (as is necessary) on Form S-3 (or, if such
form is unavailable for such a registration, on such other form as is available
for such a registration, subject to the consent of the Holders holding a
majority of the Registrable Securities and the provisions of Section 2(c), which
consent will not be unreasonably
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withheld), covering the resale of all of the Registrable Securities. Such
Registration Statement shall initially register for resale a number of shares of
Common Stock equal to at least 200% of the sum of the number of Series D
Conversion Shares and the Series F Conversion Shares issued and issuable and
150% of the number of Warrant Shares issued and issuable as of the business day
immediately preceding the date the Company files the Registration Statement
(without regard to any limitations on conversions or exercises), subject to
adjustment as provided in Section 3(b). Such registered shares of Common Stock
shall be allocated among the Investors pro rata based on the total number of
Registrable Securities issued or issuable as of each date that a Registration
Statement, as amended, relating to the resale of the Registrable Securities is
declared effective by the SEC. The Company shall use its best efforts to have
the Registration Statement(s) declared effective by the SEC as soon as
practicable, but in no event later than the Scheduled Effective Date (as defined
in Section 2(h)).
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 of such establishment or increase, as the case may be.
In the event an Investor shall sell or otherwise transfer any of such holder's
Registrable Securities, each transferee shall be allocated a pro rata portion of
the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any person or entity
which does not hold any Registrable Securities shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors. For the avoidance of doubt, the number of Registrable
Securities held by any Investor shall be determined as if all Series D Preferred
Shares, Series F Preferred Shares and Warrants then outstanding were converted
into or exercised for Registrable Securities, without regard to any limitations
on conversions or exercises.
c. Counsel. Subject to Section 5 hereof, in connection with any
offering pursuant to this Section 2, the Investors shall have the right to
select one legal counsel, which counsel shall be selected by the Investors
holding a majority of the Registrable Securities. The Company shall reasonably
cooperate with any such counsel.
d. Piggy-Back Registrations. If at any time prior to the expiration
of the Registration Period (as hereinafter defined) the number of shares of
Common Stock available for sale under an effective Registration Statement is
insufficient to cover all of the Registrable Securities (in accordance with
Section 3(b)) and the Company proposes to file with the SEC a Registration
Statement relating to an offering for its own account or the account of others
under the 1933 Act of any shares of Common Stock (other than on Form S-4 or Form
S-8 or their then equivalents relating to securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans), the
Company shall promptly send to each Investor who is entitled to registration
rights under this Section 2(d) written notice of the Company's intention to file
a Registration Statement and of such Investor's rights under this Section 2(d)
and, if within twenty (20) days after receipt of such notice, such
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Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, subject to the priorities set forth in
Section 2(e) below. No right to registration of Registrable Securities under
this Section 2(d) shall be construed to limit any registration required under
Section 2(a). The obligations of the Company under this Section 2(d) may be
waived by Investors holding a majority of the Registrable Securities. If an
offering in connection with which an Investor is entitled to registration under
this Section 2(d) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed by the Company, offer and sell such Registrable Securities in
an underwritten offering using the same underwriter or underwriters and, subject
to the provisions of this Agreement, on the same terms and conditions as other
shares of Common Stock included in such underwritten offering.
e. Priority in Piggy-Back Registration Rights in connection with
Registrations for Company Account. If the registration referred to in Section
2(d) is to be an underwritten public offering and the managing underwriter(s)
advise the Company in writing that, in their reasonable good faith opinion,
marketing or other factors dictate that a limitation on the number of shares of
Common Stock which may be included in the Registration Statement is necessary to
facilitate and not adversely affect the proposed offering, then the Company
shall include in such registration: (1) first, all securities the Company
proposes to sell for its own account, (2) second, up to the full number of
securities proposed to be registered for the account of the holders of
securities entitled to inclusion of their securities in the Registration
Statement by reason of demand registration rights, and (3) third, the securities
requested to be registered by the Investors and other holders of securities
entitled to participate in the registration, as of the date hereof, drawn from
them pro rata based on the number each has requested to be included in such
registration.
f. Eligibility for Form S-3. The Company represents and warrants
that on the date hereof it currently meets the requirements for the use of Form
S-3 for registration of the sale by the Investors of the Registrable Securities
and the Company has filed all reports required to be filed by the Company with
the SEC in a timely manner so as to obtain and maintain such eligibility for the
use of Form S-3. The Company covenants that on and after the date hereof it will
use its best efforts to meet the requirements for the use of Form S-3 for
registration of the sale by the Investors of the Registrable Securities and
shall file all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain such eligibility for the use of Form S-3. In the
event that Form S-3 is not available for sale by the Investors of the
Registrable Securities, then the Company (i) with the consent of the Investors
holding a majority of the Registrable Securities pursuant to Section 2(a), shall
register the sale of the Registrable Securities on another appropriate form, and
(ii) the Company shall 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.
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g. Intentionally omitted.
h. Effect of Failure to Obtain and Maintain Effectiveness of
Registration Statement. If (i) the Registration Statement is not declared
effective by the SEC on or before the Scheduled Effective Date (as defined
below); or (ii) after the Registration Statement has been declared effective by
the SEC, sales cannot be made (other than on any days during any Allowable Grace
Period (as defined in Section 3(f))) pursuant to the Registration Statement
(whether because of a failure to keep the Registration Statement effective, to
disclose such information as is necessary for sales to be made pursuant to the
Registration Statement, to register sufficient shares of Common Stock or
otherwise); then, as partial relief for the damages to any holder by reason of
any such delay in or reduction of its ability to sell any of the Registrable
Securities (which remedy shall not be exclusive of any other remedies available
at law or in equity), the Company shall pay to each holder of Series D Preferred
Shares or Series F Preferred Shares an amount in cash per Series D Preferred
Share and Series F Preferred Share held equal to the product of (i) $10,000
multiplied by (ii) the sum of (A) .00033, for each day, up to and including the
30th day, that the Registration Statement is not declared effective by the SEC
after the Scheduled Effective Date, plus, (B) beginning on and including the
31st day after the Scheduled Effective Date, .0005, for each day that the
Registration Statement is not declared effective by the SEC after the 30th day
after the Scheduled Effective Date, plus (C) the product of (I) .0005 multiplied
by (II) the number of days after the date the Registration Statement has been
declared effective by the SEC that the Registration Statement is not available
(other than on any days during any Allowable Grace Period) for sales of at least
all of the Registrable Securities. The payments to which a holder shall be
entitled pursuant to this Section 2(h) are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be paid within five (5)
business days of the earlier of (A) the first day of the month following the
occurrence of the event resulting in the requirement to make Registration Delay
Payments, or (B) the date on which the event resulting in the requirement to
make 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 (or the maximum rate
permitted by law), prorated for partial months, until paid in full. Registration
Delay Payments, and any interest thereon, shall be paid in cash, unless an
Investor elects to have such amounts included in the Additional Amount (as
defined in the Certificate of Designations) by providing the Company written
notice of such election at any time prior to the Company's payment of such
amounts. If the Company fails to pay the Registration Delay Payments, including
any interest thereon, within 15 business days of the applicable payment date,
then the holder entitled to such payments shall have the right at any time, so
long as the Company continues to fail to make such payments, to require the
Company, upon written notice, to immediately issue, in lieu of the Registration
Delay Payments, including any interest thereon, the number of shares of Common
Stock (the "REGISTRATION DELAY PAYMENT SHARES") equal to the quotient of (X) the
sum of the Registration Delay Payments and all interest accrued thereon, divided
by (Y) the lowest Closing Bid Price on any day during the period beginning on
and including the date the Registration Delay Payments were due and payable and
ending on and including the date the holder delivers written notice to the
Company of its election to receive shares of Common Stock in lieu of the
Registration Delay Payments. "SCHEDULED EFFECTIVE DATE" means 120 days after the
Issuance Date; provided, however, that if the Registration Statement could be
declared effective on or prior to the Scheduled Effective Date but for the
written objection (an "INVESTOR OBJECTION NOTICE") of one or more Investors to
either (i) the inclusion or exclusion of
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language or statements in such Registration Statement which the SEC, pursuant to
a comment letter addressed to the Company, is requiring the Company to include
or exclude in such Registration Statement or (ii) a comment by the SEC, pursuant
to a comment letter addressed to the Company, which relates to such Investor or
effects such Investors' rights in the Registration Statement, then the Scheduled
Effective Date, subject to Section 3(e), shall be extended with respect to only
such Investor or Investors who have delivered an Investor Objection Notice to
the later of 120 days after the Issuance Date or 3 business days after the Cure
Date (as defined below).
3. RELATED OBLIGATIONS.
Whenever an Investor has requested that any Registrable Securities be
registered pursuant to Section 2(d) or at such time as the Company is obligated
to file a Registration Statement with the SEC pursuant to Section 2(a), the
Company will use its 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 (on or prior
to the sixtieth day after the Issuance Date for the registration of Registrable
Securities pursuant to Section 2(a)) and use its best efforts to cause such
Registration Statement relating to the Registrable Securities to become
effective as soon as possible after such filing (but in no event later than the
Scheduled Effective Date applicable to the registration of such Registrable
Securities pursuant to Section 2(a)), and keep such 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 Registrable Securities without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto), or (ii) the date on which (A) the Investors shall have sold all the
Registrable Securities and (B) none of the Series D Preferred Shares, Series F
Preferred Shares or Warrants is outstanding (the "REGISTRATION PERIOD"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The Company shall submit to the SEC, within
three business days after the Company learns that no review of the Registration
Statement will be made by the staff of the SEC or that the staff of the SEC has
no further comments on the Registration Statement, as the case may be, a request
for acceleration of effectiveness of the Registration Statement to a time and
date not later than 48 hours after the submission of such request.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with 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 with respect to the disposition of
all Registrable Securities of the Company covered by such Registration
Statement. In the event the number of shares available under all Registration
Statements filed pursuant to this Agreement is insufficient to cover all of the
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Registrable Securities, the Company shall amend the appropriate Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover all of the Registrable
Securities for all Investors, in each case, as soon as practicable, but in any
event within 15 days after the necessity therefore arises. The Company shall use
its best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof. For
purposes of the foregoing provision, the number of shares available under all
Registration Statements shall be deemed "insufficient to cover all of the
Registrable Securities" if at any time the number of Registrable Securities
issued upon conversion of the Series D Preferred Shares or the Series F
Preferred Shares or upon exercise of the Warrants or issuable upon conversion of
the then outstanding Series D Preferred Shares or Series F Preferred Shares or
upon exercise of the then outstanding Warrants is greater than the quotient
determined by dividing (i) the number of shares of Common Stock available for
resale under such Registration Statements by (ii) 1.5. For purposes of the
calculation set forth in the foregoing sentence, any restrictions on the
convertibility of the Series D Preferred Shares or the Series F Preferred Shares
or on the exercisability of the Warrants shall be disregarded and such
calculation shall assume that the Series D Preferred Shares, the Series F
Preferred Shares and Warrants are then convertible and exercisable,
respectively, into shares of Common Stock at the then prevailing Conversion Rate
(as defined in the Certificate of Designations) or Warrant Exercise Price (as
defined in the Warrants), as the case may be.
c. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement and its legal counsel
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 and schedules, all documents incorporated therein
by reference and all exhibits, the prospectus included in such Registration
Statement (including each preliminary prospectus) and, with regards to such
Registration Statement(s), any correspondence by or on behalf of the Company to
the SEC or the staff of the SEC (other than unredacted versions of supplemental
correspondence for which confidential treatment has been requested) and any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives, (ii) promptly after the effectiveness of any Registration
Statement, ten 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 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.
d. The Company shall use reasonable efforts to (i) register and
qualify, to the extent required under applicable law, the Registrable Securities
covered by a Registration Statement under such other securities or "blue sky"
laws of such jurisdictions in the United States as any Investor reasonably
requests, (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
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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(d), (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 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.
e. In the event that a Registration Statement could be declared
effective but for the Investor Objection Notice of one or more Investors, then
any Investor that has either (A) not given an Investor Objection Notice or (B)
given an Investor Objection Notice which has subsequently been revoked may, upon
written notification to the Company (the "EFFECTIVENESS NOTICE"), require the
Company to cause the Registration Statement registering such Investor's
Registrable Securities to be declared effective within five (5) business days of
the Company's receipt of such Effectiveness Notice. The Company shall provide
written notice (an "OPT-OUT NOTICE"), within one (1) business day of its receipt
of an Effectiveness Notice from an Investor pursuant to this Section 3(e), to
all other Investors that it has received an Effectiveness Notice. Each Investor
within two (2) business days of its receipt of the Opt-Out Notice will provide
written notice to the Company if it elects to opt-out of the current
Registration Statement. If an Investor provides an Effectiveness Notice pursuant
to this Section 3(e), then (i) the Company shall be obligated to amend the
Registration Statement to remove each Investor who (A) provided an Investor
Objection Notice and has not provided a written notice of the revocation of such
Investor Objection Notice within two (2) business days of such Investor's
receipt of an Opt-Out Notice or (B) elected to opt-out of such Registration
Statement and (ii) the Scheduled Effective Date, for purposes of Section 2(h),
as it applies to any Investor who has elected to opt-out of such Registration
Statement shall be extended until such time as such Investor provides written
notice to the Company to register such Investor's Registrable Securities,
whereupon, the Company shall register such Investor's Registrable Securities in
accordance with the terms of this Agreement (with the exception that the Company
shall have 15 days after the receipt of such request to file such new
Registration Statement and the Scheduled Effective Date for such Registration
Statement will be the later of (i) 120 days after the Issuance Date and (ii) 60
days after the receipt of such written request). In the event that the Company
is required to remove from any Registration Statement the Registrable Securities
of those Investors who provided an Investor Objection Notice in order to comply
with this Section 3(e), then on such date as the SEC no longer requires such
language, statements or comments which were objected to in the Investor
Objection Notice or such Investors, by written notification, waive their prior
objection to such language, statements or comments (the "CURE DATE") the Company
shall register such Investor's or Investors' Registrable Securities in
accordance with the terms of this Agreement (with the exception that the Company
shall have 15 days after the Cure Date to file such new Registration Statement
and the Scheduled Effective Date for such Registration Statement will be the
later of (i) 120 days after the Issuance Date or (ii) 60 days after the Cure
Date). Any Registration Statement
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required pursuant to Section 2(a), 3(b) or 3(e) shall be deemed to constitute a
"Registration Statement" for purposes of the Certificate of Designations, the
Exchange Agreement and this Agreement.
f. As promptly as practicable after becoming aware of such event,
the Company shall notify each Investor in writing of the happening of any event
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, and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
ten copies of such supplement or amendment to each Investor (or such other
number of copies as such Investor may reasonably request). The Company shall
also promptly notify 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 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. Notwithstanding anything to the contrary in this
Section 3(f), at any time after the Registration Statement has been declared
effective, 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 opinion of the Board of Directors of the Company and its
counsel, in the best interest of the Company and, in the opinion of counsel to
the Company, otherwise required (a "GRACE PERIOD"); provided, that the Company
shall promptly (I) notify the Investors in writing of the existence of (but in
no event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to a Grace Period 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 15 consecutive calendar days and during any consecutive 365-day period,
the Grace Period shall not exceed 45 calendar days in the aggregate (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 which is the
later of the date specified in the notice or the date the holders receive the
notice referred to in clause (I) and shall end on and include the date which is
the later of the date specified in the notice or the date the holders receive
the notice referred to in clause (II). The provisions of Section 2(h) of this
Agreement shall not be applicable during the period of any Allowable Grace
Period. Upon expiration of the Allowable Grace Period, the Company shall again
be bound by the first sentence of this Section 3(f) with respect to the
information giving rise thereto. In the event a Grace Period exceeds the
Allowable Grace Period, the Maturity Date (as defined in the Certificate of
Designations) shall be delayed one and one-half (1 1/2) days for each day in
excess of the Allowable Grace Period as provided in Section 2(g) of the
Certificate of Designations.
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g. The Company shall use its best efforts to 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 for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify each Investor who holds Registrable Securities being sold
(and, in the event of an underwritten offering, the managing underwriters) 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 permit each Investor and a single counsel,
initially Xxxxxx Xxxxxx & Xxxxx or such other counsel as thereafter designated
as selling stockholders' counsel by the Investors who hold a majority of the
Registrable Securities being sold, to review and comment upon a Registration
Statement and all amendments and supplements thereto at least five business days
prior to their filing with the SEC, and shall not file any document in a form to
which such counsel reasonably objects. The Company shall not submit a request
for acceleration of the effectiveness of a Registration Statement or any
amendment or supplement thereto without the prior approval of such counsel,
which consent shall not be unreasonably withheld.
i. At the request of any Investor and at such Investor's expense,
the Company shall use its best efforts to furnish to such Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and the Investors and (ii) an opinion, dated as of such
date, of independent counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the underwriters, if any, and the
Investors.
j. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to a
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investors, and (iv) one firm of attorneys
retained by all such underwriters (collectively, the "INSPECTORS") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "RECORDS"), as shall be reasonably deemed
necessary by each Inspector, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall 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
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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.
k. 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 of which the Company has knowledge. 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.
l. The Company shall use its 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 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 the
Registration Statement on the Nasdaq SmallCap Market, or the Nasdaq National
Market, The American Stock Exchange, Inc. or The New York Stock Exchange, Inc.,
as the case may be, and, without limiting the generality of the foregoing, 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(l).
m. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, any managing
underwriter or underwriters, to 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 managing underwriter or underwriters, if any, or, if there is no
managing underwriter or underwriters, the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters, if any, or
the Investors may request.
n. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable Securities
pursuant to a Registration Statement during the Registration Period.
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o. The Company shall provide a transfer agent and registrar for all
such Registrable Securities not later than the effective date of such
Registration Statement.
p. If reasonably requested by the managing underwriters or an
Investor, the Company shall (i) immediately incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Investors agree should be included therein relating to the
sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and any other terms of the underwritten (or best efforts underwritten) offering
of the Registrable Securities to be sold in such offering; (ii) make all
required filings of such prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment; and (iii) supplement or make any reasonable
amendments to any Registration Statement or the related prospectus if requested
by an Investor or any underwriter of such Registrable Securities.
q. The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities during
the Registration Period.
r. The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with 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 the Registration Statement.
s. The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.
t. Within two (2) business days after the Registration Statement
which includes the 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 the Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.
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4. OBLIGATIONS OF THE INVESTORS.
a. At least seven 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 registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
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 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. In the event any Investor elects to participate in an
underwritten public offering pursuant to Section 2, each such Investor agrees to
enter into and perform such Investor's obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations (only with respect to violations
which occur in reliance upon and in conformity with information furnished in
writing to the Company by such Investor expressly for use in the Registration
Statement for such underwritten public offering), with the managing underwriter
of such offering and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities, unless
such Investor notifies the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
d. 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) or
the first sentence of Section 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 Section 3(f), or until, in the case of a Grace Period, after
the date on which the Allowable Grace Period ended.
e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Investors entitled hereunder to approve such arrangements, (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
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underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions.
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 and fees and disbursements of
one counsel for the Investors selected by the Investors holding a majority of
the Registrable Securities, shall be paid by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
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a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor who holds such
Registrable Securities, the directors, officers, partners, employees, agents of,
and each Person, if any, who controls, any Investor within the meaning of the
1933 Act or the Securities Exchange Act of 1934, as amended (the "1934 ACT"),
and any underwriter (as defined in the 0000 Xxx) for the Investors, and the
directors and officers of, and each Person, if any, who controls, any such
underwriter 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, 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 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, or (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 (the
matters in the foregoing clauses (i) through (iii) being, collectively,
"VIOLATIONS"). Subject to the restrictions set forth in Section 6(d) with
respect to the number of legal counsel, the Company shall reimburse each
Indemnified Person 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 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 any Indemnified Person or
underwriter 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(c); (ii) with respect to any prospectus, shall not inure
to the benefit of any Indemnified Person or 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 prospectus was
corrected in a subsequent prospectus that was delivered to the Indemnified
Person prior to the pertinent sale or sales by the Indemnified
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Person, 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, (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; 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. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer or disposition of the
Registrable Securities by the Investors.
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, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (collectively and together with an
Indemnified Person, 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(d),
such Investor will reimburse any legal or other expenses reasonably incurred by
them promptly as such expenses are incurred and are due and payable 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; 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 prospectus shall not inure to
the benefit of any Indemnified Party if the untrue statement or omission of
material fact contained in the prospectus was corrected in a subsequent
prospectus that was delivered to the purchaser or purchasers prior to the
pertinent sale or sales by such Investors.
c. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information such persons so furnished in writing
expressly for inclusion in the Registration Statement.
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d. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of 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 the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
selected by the indemnifying party and approved by the Indemnified Person or the
Indemnified Party, as the case may be, which approval shall not be unreasonably
withheld; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, 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 such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The indemnifying party shall pay for only one
separate legal counsel for the Indemnified Persons or the Indemnified Parties,
as applicable, and such counsel shall be selected by Investors holding a
majority-in-interest of the Registrable Securities included in the Registration
Statement to which the Claim relates, if the Investors are entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. 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 nonprivileged 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, without the consent of the Indemnified Party or Indemnified Person (as
the case may be), 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 within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is materially prejudiced in its ability to
defend such action.
e. 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.
f. 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
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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 seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
the 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:
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
Exchange Agreement) 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 that it has complied with the 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 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.
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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 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 promptly
after such assignment; (ii) the Company is promptly furnished with written
notice of (a) the name, address and fax number 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; and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Exchange Agreement.
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 hold two-thirds (_) of the Registrable Securities.
Notwithstanding the above, the provisions of Sections 2(h), 3(e) and 10 hereof
may only be amended or the observance thereof waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
consent of the Company and each of the Investors. 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. No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
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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) upon receipt, when delivered by a 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:
General Magic, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Xxxxxx, Godward LLP
Five Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to a Holder, to its address and facsimile number on the Schedule of
Holders attached hereto, with copies to such Holder's representatives as set
forth on the Schedule of Holders. Each party shall provide five (5) days' prior
written notice to the other party of any change in address or facsimile number.
If to another Investor, to its address and facsimile number set forth on the
Notice of Transfer. 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 such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, overnight or courier delivery or transmission by facsimile
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. The corporate laws of the State of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and
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interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of (i) the state and federal courts sitting in
the City of New York, borough of Manhattan and (ii) 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 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.
e. This Agreement, the Exchange Agreement, the Certificate of
Designations and the Warrants 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 Exchange Agreement, the
Certificate of Designations and the Warrants supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
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 two or more 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 party 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 agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
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j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding a majority of the Registrable
Securities, determined as if all of the Series D Preferred Shares, the Series F
Preferred Shares and Warrants then outstanding have been converted into or
exercised for, as the case may be, Registrable Securities (without regard to any
limitations on conversions or exercises).
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. The Holders (other than RGC International Investors, LDC) and
the Company agree to waive all of each party's rights, title and claims and the
other's obligations under the Registration Rights Agreement by and among the
Company, the Holders and certain other signatories thereto, dated March 30,
1999, as amended.
-22-
23
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: HOLDERS:
GENERAL MAGIC, INC. HFTP INVESTMENT LLC
By: Promethean Asset Management, L.L.C.
By: Its: Investment Manager
----------------------------
Name:
Its:
By:
---------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Its: President
RGC INTERNATIONAL INVESTORS, LDC
By: Xxxx Xxxx Capital Management, L.P.
Its: Investment Manager
By: RGC General Partner Corp.
Its: General Partner
By:
----------------------------------
Name: Xxxxx Xxxxx
Its: Managing Director
HALIFAX FUND, L.P.
By: The Palladin Group, L.P.
Its: Attorney-in-Fact
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
24
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management, L.L.C.
Its: General Partner
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
PALLADIN OVERSEAS FUND LIMITED
By: The Palladin Group L.P.
Its: Attorney-in-Fact
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
THE GLENEAGLES FUND COMPANY
By: The Palladin Group L.P
Its: Attorney-in-Fact
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
LANCER SECURITIES LTD.
By: The Palladin Group L.P
Its: Attorney-in-Fact
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
[PAGE 2 OF 3 OF REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGES]
25
XXXXXX CAPITAL LTD.
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Its: Authorized Signatory
XXXXXXX CAPITAL LTD.
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Its: Authorized Signatory
CONSECO DIRECT LIFE
By:
----------------------------------
Name:
Its:
[PAGE 3 OF 3 OF REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGES]
26
SCHEDULE OF HOLDERS
INVESTOR'S REPRESENTATIVES'
INVESTOR ADDRESS ADDRESS
INVESTOR NAME AND FACSIMILE NUMBER AND FACSIMILE NUMBER
-------------------------------- -------------------------------------------- --------------------------------
HFTP Investment LLC _Promethean Asset Management, L.L.C. Xxxxxx Xxxxxx & Zavis
000 Xxxxxxxxx Xxxxxx, 00xx Floor 000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. X'Xxxxx, Xx. Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000 Facsimile: 312-902-1061
Facsimile: 212-702-5200 Telephone: 000-000-0000
Residence: New York
RGC International Investors, LDC c/o Xxxx Xxxx Capital Management, L.P. Xxxx Xxxx Capital Management, L.P.
0 Xxxx Xxxxx Xxxx, Xxxxx 000 3 Bala Plaza East, Suite 200
Bala Cynwyd, Pennsylvania Bala Cynwyd, Pennsylvania
Attn: Xxxx Xxxxxxxx Attn: Xxxx Xxxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: Cayman Islands
Palladin Partners I, L.P. c/o The Palladin Group L.P. The Palladin Group L.P.
000 Xxxxxxxxx Xxxxxx As Investment Advisor
Xxxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Attn: Xxxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: New York Telephone: 000-000-0000
Halifax Fund, L.P. x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx Xxxxxxx) Ltd. The Palladin Group L.P.
Corporate Centre, West Bay Road As Investment Advisor
X.X. Xxx 00000 SMB 195 Maplewood Avenue
Grand Cayman, Cayman Islands Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: Cayman Islands Telephone: 000-000-0000
The Gleneagles Fund Company c/o Citco Fund Services (Cayman Islands) Ltd. The Palladin Group L.P.
Corporate Centre, West Bay Road As Investment Advisor
X.X. Xxx 00000 SMB 195 Maplewood Avenue
Grand Cayman, Cayman Islands Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: Cayman Islands Telephone: 000-000-0000
Palladin Overseas Fund Limited c/o Citco Fund Services (Cayman Islands) Ltd. The Palladin Group L.P.
Corporate Centre, West Bay Road As Investment Advisor
X.X. Xxx 00000 SMB 195 Maplewood Avenue
Grand Cayman, Cayman Islands Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: Cayman Islands Telephone: 000-000-0000
Lancer Securities Ltd. c/o The Palladin Group L.P. The Palladin Group L.P.
000 Xxxxxxxxx Xxxxxx As Investment Advisor
Xxxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Attn: Xxxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: New York Telephone: 000-000-0000
27
INVESTOR'S REPRESENTATIVES'
INVESTOR ADDRESS ADDRESS
INVESTOR NAME AND FACSIMILE NUMBER AND FACSIMILE NUMBER
-------------------------------- -------------------------------------------- --------------------------------
Xxxxxx Capital Ltd. _Citadel Investment Group, L.L.C. Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Simpler Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000
Residence: Illinois
Xxxxxxx Capital Ltd. _Citadel Investment Group, L.L.C. Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Simpler Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000
Residence: Illinois
Conseco Direct Life c/o The Palladin Group L.P. The Palladin Group L.P.
000 Xxxxxxxxx Xxxxxx As Investment Advisor
Xxxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Attn: Xxxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Residence: New York Telephone: 000-000-0000
28
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn: ___________________
RE: GENERAL MAGIC, INC.
Ladies and Gentlemen:
We are counsel to GENERAL MAGIC, INC., a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Exchange Agreement (the "EXCHANGE AGREEMENT") entered into by and among the
Company and the Holders named therein (collectively, the "HOLDERS") pursuant to
which the Company issued to the Holders shares of its Series F Convertible
Preferred Stock, par value $.001 per share (the "PREFERRED SHARES") convertible
into shares of the Company's common stock, par value $.001 per share (the
"COMMON STOCK"). Pursuant to the Exchange 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
Preferred Shares and the Company's Series D Convertible Preferred Stock held by
the Holders and the exercise of certain warrants held by the Holders, under the
Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Registration Rights Agreement, on ____________
___, 1999, the Company filed a Registration Statement on Form S-3 (File No.
333-_____________) (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities which
names 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 as
of the date hereof, 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.
Very truly yours,
[COMPANY COUNSEL]
By:
-------------------------------
cc: [LIST NAMES OF HOLDERS]
