AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), made as of this 29th day of October, 1996, by and among Glasgal
Communications, Inc., a Delaware corporation (the "COMPANY"), and Southbrook
International Investments, Ltd., a British Virgin Islands corporation (the
"PURCHASER").
WHEREAS, the Company issued and sold to the Purchaser and the
Purchaser acquired 250,000 shares of the Company's Series A Convertible
Preferred Stock, par value $.001 per share (the "SERIES A PREFERRED"), pursuant
to the Convertible Preferred Stock Purchase Agreement, dated as of September 30,
1996, by and among the Company and the Purchaser (the "SERIES A PURCHASE
AGREEMENT").
WHEREAS, in connection with the Series A Purchase Agreement
and as a condition to the parties obligations thereunder, the Company and the
Purchaser entered into a Registration Rights Agreement, dated as of September
30, 1996 (the "ORIGINAL REGISTRATION RIGHTS AGREEMENT").
WHEREAS, the Company and the Purchaser are entering into a
Convertible Stock Purchase Agreement (the "SUBSEQUENT PURCHASE AGREEMENT"),
dated as of the date hereof, pursuant to which the Company will to issue and
sell to the Purchaser and the Purchaser will acquire shares of the Company's
Series B Convertible Preferred Stock (the "SERIES B PREFERRED") and the
Company's Series C Convertible Preferred Stock (the "SERIES C PREFERRED").
WHEREAS, the Company and the Purchaser desire to amend and
restate the Original Registration Rights Agreement in its entirety hereby.
WHEREAS, the execution of this Agreement is a condition to the
closing of the transactions contemplated by the Subsequent Purchase Agreement.
THEREFORE, The parties hereby agree as follows:
1. DEFINITIONS
Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"ADVICE" shall have meaning set forth in SECTION 4(O).
"AFFILIATE" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "CONTROL," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "AFFILIATED," "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"BLACKOUT" shall have the meaning set forth in SECTION 3(B).
"BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
state of New York generally are authorized or required by law or other
government actions to close.
"CLOSING" or "CLOSINGS" shall mean the Series A Closing,
Series B Closing or Series C Closing, as applicable.
"CLOSING DATE or CLOSING DATES" shall mean the Series A
Closing Date, Series B Closing Date or Series C Closing Date, as applicable.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's Common Stock, par value
$.001 per share.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
SECTION 2(A)(III).
"EVENT" shall have the meaning set forth in SECTION 5.
"EVENT DATE" shall have the meaning set forth in SECTION 5.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in
SECTION 7(C).
"INDEMNIFYING PARTY" shall have the meaning set forth in
SECTION 7(C).
"INITIAL EFFECTIVENESS DATE" means the 90th day following the
Series A Closing Date.
"INITIAL FILING DATE" means the 5th Business Day following the
date of this Agreement.
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"INITIAL REGISTRABLE SECURITIES" means the shares of Common
Stock issuable upon conversion in full of the Series A Preferred and Series B
Preferred issued and sold to the Purchaser pursuant to the Purchase Agreements;
PROVIDED, HOWEVER, that in order to account for adjustments in the conversion
ratios for such shares, Initial Registrable Securities shall include a number of
shares of Common Stock equal to no less than two times the number of shares of
Common Stock issuable upon conversion in full of such Series A Preferred and
Series B Preferred based on a computation as at the Series B Closing Date or
such other number of shares of Common Stock as agreed to by the parties to the
Purchase Agreement. However, notwithstanding anything herein contained to the
contrary, if in fact the number of shares of Common Stock issuable upon
conversion in full of the Series A Preferred and Series B Preferred exceeds
twice the number of shares of Common Stock issuable upon conversion in full of
such Preferred Stock based upon a computation as at the Series B Closing Date,
then the term "Initial Registrable Securities" shall be deemed to include such
additional shares and the Company shall promptly file appropriate amendments to
the Initial Registration Statement to evidence such increase or the Company
shall promptly file a new registration statement covering the Initial
Registrable Securities not registered under the Initial Registration Statement
in the time contemplated herein for filing of appropriate amendments in
accordance with the terms hereof.
"INITIAL REGISTRATION STATEMENT" means the registration
statement, contemplated by SECTION 2(A)(I), including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"LOSSES" shall have the meaning set forth in SECTION 7(A).
"NEW YORK COURTS" shall have the meaning set forth in SECTION
9(I).
"PERSON" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PREFERRED STOCK" means, collectively, the Series A Preferred,
Series B Preferred and Series C Preferred.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means each of the prospectus included in the
Initial Registration Statement and the prospectus included in the Series C
Registration Statement, as the case may be (including, without limitation, a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
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prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statements, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"PURCHASE AGREEMENTS" means, collectively, the Series A
Purchase Agreement and the Subsequent Purchase Agreement.
"REGISTRABLE SECURITIES" means, collectively, the Initial
Registrable Securities and the Series C Registrable Securities.
"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 144A" means Rule 144A promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 158" means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES A CLOSING" shall have the meaning set forth in the
Series A Purchase Agreement.
"SERIES A CLOSING DATE" shall have the meaning set forth in
the Series A Purchase Agreement.
"SERIES B CLOSING" shall have the meaning set forth in the
Subsequent Purchase Agreement.
"SERIES B CLOSING DATE" shall have the meaning set forth in
the Subsequent Purchase Agreement.
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"SERIES C CLOSING" shall have the meaning set forth in the
Subsequent Purchase Agreement.
"SERIES C CLOSING DATE" shall have the meaning set forth in
the Subsequent Purchase Agreement.
"SERIES C EFFECTIVENESS DATE" means the 75th day following the
Series C Closing date.
"SERIES C FILING DATE" means the 14th day following the Series
C Closing Date.
"SERIES C REGISTRABLE SECURITIES" means the shares of Common
Stock issuable upon conversion in full of the Series C Preferred to be issued
and sold to the Purchaser pursuant to the Subsequent Purchase Agreement;
PROVIDED, HOWEVER, that in order to account for adjustments in the conversion
ratio for such shares, Series C Registrable Securities shall include a number of
shares of Common Stock equal to no less than two times the number of shares of
Common Stock issuable upon conversion in full of such Series C Preferred based
on a computation as at the Series C Closing Date or such other number of shares
of Common Stock as agreed to by the parties to the Subsequent Purchase
Agreement. However, notwithstanding anything herein contained to the contrary,
if in fact the number of shares of Common Stock issuable upon conversion in full
of the Series C Preferred exceeds twice the number of shares of Common Stock
issuable upon conversion in full of such Series C Preferred based upon a
computation as at the Series C Closing Date, then the term "Series C Registrable
Securities" shall be deemed to include such additional shares and the Company
shall promptly file appropriate amendments to the Series C Registration
Statement to evidence such increase or the Company shall promptly file a new
registration statement covering the Series C Registrable Securities not
registered under the Series C Registration Statement in the time contemplated
herein for filing of appropriate amendments in accordance with the terms hereof.
"SERIES C REGISTRATION STATEMENT" means the registration
statement contemplated by Section 2(a)(ii), including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"SPECIAL COUNSEL" means any special counsel to the Holders,
for which the Holders will be reimbursed by the Company pursuant to SECTION 5.
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means a
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective registration
statement.
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2. SHELF REGISTRATION
(a) (i) On or prior to the Initial Filing Date, the
Company shall prepare and file with the Commission the Initial Registration
Statement covering all Initial Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415.
(ii) On or prior to the Series C Filing Date,
the Company shall prepare and file with the Commission the Series C Registration
Statement covering all Series C Registrable Securities for an offering to be
made on a continuous basis pursuant to Rule 415.
(iii) Each Registration Statement shall be a
"shelf" registration statement on Form S-3 or another appropriate form
permitting registration of Registrable Securities for resale by the Holders in
the manner or manners designated by them (including, without limitation, public
or private sales and one or more underwritten offerings). The Company shall use
its best efforts to cause each Registration Statement to be declared effective
under the Securities Act as promptly as practicable after the filing thereof,
but in any event prior to, in the case of the Initial Registration Statement,
the Initial Effectiveness Date and, in the case of the Series C Registration
Statement, the Series C Effectiveness Date, and to keep such Registration
Statement continuously effective under the Securities Act from the effective
date thereof until the date which is three years after, with respect to the
Initial Registration Statement, the date of this Agreement and, with respect to
the Series C Registration Statement, the Series C Closing Date or, in either
case, such earlier date when all Registrable Securities covered by such
Registration Statement have been sold or may be sold pursuant to Rule 144 as
determined by the counsel to the Company pursuant to a written opinion letter,
addressed to the Holders, to such effect (the "EFFECTIVENESS PERIOD"); PROVIDED,
HOWEVER, that the Company shall not be deemed to have used its best efforts to
keep a Registration Statement effective during the Effectiveness Period if it
voluntarily takes any action that would result in the Holders not being able to
sell the Registrable Securities covered by such Registration Statement during
the Effectiveness Period, unless such action is required under applicable law or
the Company has filed a post-effective amendment to such Registration Statement
and the Commission has not declared it effective or except as otherwise
permitted by SECTION 3(A).
(b) If the Holders of a majority of the Initial Registrable
Securities or the Series C Registrable Securities, as the case may be, so elect,
an offering of such Registrable Securities pursuant to the Initial Registration
Statement or Series C Registration Statement, as the case may be, may be
effected in the form of an underwritten offering. In such event, and if the
managing underwriters advise the Company and such Holders in writing that in
their opinion the amount of Registrable Securities proposed to be sold in such
offering exceeds the amount of Registrable Securities which can be sold in such
offering, there shall be included in such underwritten offering the amount of
such Registrable Securities which in the opinion of such managing underwriters
can be sold, and such amount shall be allocated PRO RATA among the Holders
proposing to sell Registrable Securities in such underwritten offering.
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(c) If any of the Registrable Securities are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority of the Registrable Securities included in such offering. No Holder
may participate in any underwritten offering hereunder unless such Person (i)
agrees to sell its Registrable Securities on the basis provided in any
underwriting agreements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such arrangements.
3. HOLD-BACK AGREEMENTS
(a) RESTRICTIONS ON PUBLIC SALE BY THE HOLDERS. Subject to
paragraph (b) of this SECTION 3, the Purchaser hereby understands and agrees
that the registration rights of the Purchaser pursuant to this Agreement and its
ability to offer and sell Registrable Securities pursuant to the Registration
Statements are limited by the provisions of the immediately following sentence.
If the Company determines in its good faith judgment that the filing of any
Registration Statement in accordance with SECTION 2 or the use of any Prospectus
thereunder would require the disclosure of material information which the
Company has a bona fide business purpose for preserving as confidential or the
disclosure of which would impede the Company's ability to consummate a
significant transaction, upon written notice of such determination by the
Company, the rights of the Purchaser to offer, sell or distribute Registrable
Securities pursuant to such Registration Statement or to require the Company to
take action with respect to the registration or sale of Registrable Securities
pursuant to such Registration Statement (including any action contemplated by
SECTION 4) will for up to 60 consecutive days in respect of a single such notice
(or multiple notices relating to a single event or series of related events) in
any 12-month period be suspended until the date upon which the Company notifies
the Holders in writing that suspension of such rights for the grounds set forth
in this SECTION 3(A) is no longer necessary.
(b) LIMITATION ON BLACKOUTS. Notwithstanding anything
contained herein to the contrary, the aggregate number of days (whether or not
consecutive) during which the Company may delay the effectiveness of a
Registration Statement or prevent offerings, sales or distributions by the
Purchaser pursuant to paragraph (a) above or the last paragraph of SECTION 4
(collectively, a "BLACKOUT") shall in no event exceed 90 days during any
12-month period and no Blackout may continue in consecutive 12 month periods.
4. REGISTRATION PROCEDURES
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission within the time
period set forth in SECTION 2 the Registration Statements on Form S-3 or another
appropriate form in accordance with the method or methods of distribution
thereof as specified by the Holders,
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and cause the Registration Statements to become effective and remain effective
as provided herein; PROVIDED, HOWEVER, that not less than five (5) Business Days
prior to the filing of a Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall (i), if requested, furnish to the Holders, their Special Counsel and any
managing underwriters, copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders, their Special Counsel
and such managing underwriters, and (ii) cause its officers and directors,
counsel and independent certified public accountants to respond to such
inquiries as shall be necessary, in the opinion of respective counsel to such
Holders and such underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act. The Company shall not file any Registration
Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities to be registered
thereunder pursuant to the terms hereof, their Special Counsel, or any managing
underwriters, shall reasonably object on a timely basis.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statements as may be
necessary to keep such Registration Statements continuously effective for the
applicable time period; (ii) cause any related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond as promptly as
practicable to any comments received from the Commission with respect to any
Registration Statement or any amendment thereto; and (iv) comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented.
(c) Notify the Holders of the applicable Registrable
Securities to be sold, and, if requested, their Special Counsel and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than five
(5) days prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one (1) Business Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed and, (B) with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to such
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the applicable Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) if at any
time any of the representations and warranties of the Company contained in any
agreement (including any underwriting agreement) contemplated hereby ceases to
be true and correct in all material respects; (v) of the receipt by the Company
of any notification with respect to the suspension
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of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (vi) of the occurrence of any event that makes
any statement made in a Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of such Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any 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.
(d) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
any Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) If requested by any managing underwriter or the Holders of
a majority of the Registrable Securities to be sold in connection with an
underwritten offering, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the applicable Registration Statement such
information as such managing underwriters and such Holders reasonably agree
should be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; PROVIDED, HOWEVER, that the
Company shall not be required to take any action pursuant to this SECTION 4(E)
that would, in the opinion of counsel for the Company, violate applicable law.
(f) Furnish to each Holder of the applicable Registrable
Securities, their Special Counsel and any managing underwriters, without charge,
at least one conformed executed copy of the Registration Statement relating to
such Registrable Securities and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(g) Promptly deliver to each Holder of the applicable
Registrable Securities, their Special Counsel, and any underwriters, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders and any underwriters in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities,
use its best efforts to register or qualify or cooperate with the selling
Holders of such Registrable
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Securities, any underwriters and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder or underwriter requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; PROVIDED, HOWEVER, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or subject
the Company to any material tax in any such jurisdiction where it is not then so
subject.
(i) Cooperate with the Holders and any managing underwriters
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such managing underwriters or
Holders may request at least two Business Days prior to any sale of such
Registrable Securities.
(j) Upon the occurrence of any event contemplated by SECTION
4(C)(VI), as promptly as practicable, prepare a supplement or amendment,
including a post-effective amendment, to the applicable Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither such Registration Statement nor such
Prospectus will contain an 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 under which they were made,
not misleading.
(k) Use its best efforts to cause all Registrable Securities
relating to each Registration Statement, to be listed on each securities
exchange or market, if any, on which similar securities issued by the Company
are then listed.
(l) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings) and take all such other actions in connection therewith (including
those reasonably requested by any managing underwriters and the Holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of the applicable Registrable Securities, and whether
or not an underwriting agreement is entered into, (i) make such representations
and warranties to such Holders and such underwriters as are customarily made by
issuers to underwriters in underwritten public offerings, and confirm the same
if and when requested; (ii) obtain and deliver copies thereof to each Holder and
the managing underwriters, if any, of opinions of counsel to the Company and
updates thereof addressed to each selling Holder and each such underwriter, in
form, scope and substance reasonably satisfactory to any such managing
underwriters and Special Counsel to the selling Holders covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as
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may be reasonably requested by such Special Counsel and underwriters; (iii)
immediately prior to the effectiveness of a Registration Statement, and, in the
case of an underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto, obtain and deliver copies to the Holders and
the managing underwriters, if any, of "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data is, or is required to be, included in such
Registration Statement), addressed to each selling Holder and each of the
underwriters, if any, in form and substance as are customary in connection with
underwritten offerings; (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less favorable
to the selling Holders and the underwriters, if any, than those set forth in
SECTION 7 (or such other provisions and procedures acceptable to the managing
underwriters, if any, and holders of a majority of Registrable Securities
participating in such underwritten offering); and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the
Registrable Securities being sold, their Special Counsel and any managing
underwriters to evidence the continued validity of the representations and
warranties made pursuant to clause 4(l)(i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(m) Make available for inspection by the selling Holders, any
representative of such Holders, any underwriter participating in any disposition
of Registrable Securities, and any attorney or accountant retained by such
selling Holders or underwriters, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
officers, directors, agents and employees of the Company and its subsidiaries to
supply all information in each case requested by any such Holder,
representative, underwriter, attorney or accountant in connection with any
Registration Statement; PROVIDED, HOWEVER, that any information that is
determined in good faith by the Company in writing to be of a confidential
nature at the time of delivery of such information shall be kept confidential by
such Persons, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities; (ii) disclosure of such information, in the opinion of counsel to
such Person, is required by law; (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to
safeguard by such Person; or (iv) such information becomes available to such
Person from a source other than the Company and such source is not bound by a
confidentiality agreement.
(n) Comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 not later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are
sold to underwriters in a firm commitment or best efforts underwritten offering
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and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective date of
the applicable Registration Statement, which statement shall cover said 12-month
period, or such shorter periods as is consistent with the requirements of Rule
158.
(o) Provide a CUSIP number for all Registrable Securities, not
later than the effective date of the applicable Registration Statement.
The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of Registrable Securities as
is required by law to be disclosed in the applicable Registration Statement and
the Company may exclude from such registration the Registrable Securities of any
such Holder who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
If any Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the inclusion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the
ownership by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such ownership does not imply that such
Holder will assist in meeting any future financial requirements of the Company,
or (ii) if such reference to such Holder by name or otherwise is not required by
the Securities Act or any similar Federal statute then in force, the deletion of
the reference to such Holder in any amendment or supplement to such Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
The Purchaser covenants and agrees that (i) it will not offer
or sell any Registrable Securities under a Registration Statement until it has
received copies of the Prospectus relating thereto as then amended or
supplemented as contemplated in SECTION 4(G) and notice from the Company that
such Registration Statement and any post-effective amendments thereto have
become effective as contemplated by SECTION 4(C) and (ii) the Purchaser and its
officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to any Registration Statement
hereunder.
Each Holder agrees by its acquisition of Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in SECTION 4(C)(II), 4(C)(III), 4(C)(IV),
4(C)(V) or 4(C)(VI), such Holder will forthwith discontinue disposition of such
Registrable Securities until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
SECTION 4(J), or until it is advised in writing (the "ADVICE") by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
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5. LIQUIDATED DAMAGES. The Company acknowledges and agrees
that the Holders will suffer damages, and that it would not be feasible to
ascertain the extent of such damages with precision, if the Company fails to
fulfill its obligations hereunder and (a) a Registration Statement is not filed
with the Commission on or prior to, in the case of the Initial Registration
Statement, the Initial Filing Date and in the case of the Series C Registration
Statement, the Series C Filing Date, (b) a Registration Statement is not
declared effective by the Commission on or prior to, in the case of the Initial
Registration Statement, the Initial Effectiveness Date and, in the case of the
Series C Registration Statement, the Series C Effectiveness Date or (c) a
Registration Statement is filed and declared effective but thereafter ceases to
be effective at any time during the Effectiveness Period therefor without being
succeeded within 30 days by a subsequent Registration Statement filed with and
declared effective by the Commission (any such failure being hereinafter
referred to as an "EVENT", and for purposes of clauses (a) and (b) the date on
which such Event occurs, or for purposes of clause (c) the date on which such
30-day limit is exceeded, being hereinafter referred to as an "EVENT DATE").
Upon the occurrence and continuation of an Event, the Company
agrees to decrease the Conversion Price applicable to a conversion of (a) if the
Event relates to the Initial Registrable Securities or Initial Registration
Statement, Series A Preferred Stock and Series B Preferred Stock, and (b) if the
Event relates to the Series C Registrable Securities or Series C Registration
Statement, Series C Preferred Stock, in accordance with Section 5(d)(i) of the
Certificates of Designation by 3% per month for each of the first two months
after each Event Date (i.e., with respect to the Series A Preferred Stock, 77%
at the commencement of the first such month and 74% at the commencement of the
second such month). Commencing on the third month after an Event Date, the 3%
monthly decrease shall be paid to the Holder in cash. Such decrease in the
Conversion Price and/or payment in cash, as the case may be, shall be paid as
liquidated damages, and not as a penalty, to each Holder; PROVIDED, that such
liquidated damages will, in each case, cease to accrue (subject to the
occurrence of another Event) on the date in which the applicable Registration
Statement is no longer subject to an order suspending the effectiveness thereof
or Proceedings relating thereto or a subsequent Registration Statement is
declared effective.
The Company shall notify each applicable Holder within five
days of each Event and Event Date. The Company shall pay the liquidated damage
due on the applicable Registrable Securities to each Holder thereof of record as
at the Event Date on the first Business Day of each month in which such
liquidated damages shall accrue by check delivered to the address for notice of
such Holder set forth herein.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to any Registration
Statement. The fees and expenses referred to in the foregoing sentence shall be
in addition to the fees and disbursements contemplated in
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Section 7.1 of each of the Purchase Agreements and include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and
expenses (A) with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and (B) in compliance with state
securities or Blue Sky laws (including, without limitation, subject to Section
6(b), fees and disbursements of counsel for the underwriters or Holders in
connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the managing underwriters, if any, or
Holders of a majority of Registrable Securities may designate)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriters, if any, or by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders
(subject to the provisions of SECTION 6(B)), (v) fees and disbursements of all
independent certified public accountants referred to in SECTION 4(1)(III)
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Company so desires such insurance, and (vii)
fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (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 Registrable Securities on any securities exchange on which similar
securities issued by the Company are then listed.
(b) In connection with each of the Initial Registration
Statement and the Series C Registration Statement, the Company shall reimburse
the Holders up to $5,000 for the fees and disbursements of one firm of attorneys
chosen by the Holders of a majority of the Registrable Securities to be
registered thereunder.
7. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding termination of this Agreement and without limitation as to time,
indemnify and hold harmless each Holder, the officers, directors, agents,
brokers, investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "LOSSES"), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or
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necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by or on behalf of
such Holder expressly for use therein, which information was reasonably relied
on by the Company for use therein or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of the
applicable Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in such Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto.
The Company shall notify the applicable Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.
(b) INDEMNIFICATION BY HOLDERS. In connection with a
Registration Statement, each applicable Holder shall furnish to the Company in
writing such information as the Company reasonably requests for use in
connection with such Registration Statement or any Prospectus and agrees,
jointly and not severally, to indemnify and hold harmless the Company, their
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses (as determined by a court of competent jurisdiction in a
final judgment not subject to appeal or review) arising solely out of or based
solely upon any untrue statement of a material fact contained in such
Registration Statement, any Prospectus thereunder, or any form of prospectus, or
arising solely out of or based solely upon any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such Holder
to the Company specifically for inclusion in such Registration Statement or such
Prospectus and that such information was reasonably relied upon by the Company
for use in such Registration Statement, such Prospectus or such form of
prospectus or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities thereunder
and was reviewed and expressly approved in writing by such Holder expressly for
use in such Registration Statement, such Prospectus or such form of Prospectus.
In no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the proceeds received by such Holder upon the
sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "INDEMNIFIED PARTY"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
-15-
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within 10 Business Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; PROVIDED, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).
(d) CONTRIBUTION. If a claim for indemnification under SECTION
7(A) or 7(B) is unavailable to an Indemnified Party or is insufficient to hold
such Indemnified Party harmless for any Losses in respect of which this Section
would apply by its terms (other than by reason of exceptions provided in this
Section), then each 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, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in ques-
-16-
tion, including any untrue or alleged untrue statement of a material fact or
omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The amount
paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in SECTION 7(C), any attorneys' or other
fees or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this SECTION 7(D) were determined by PRO
RATA allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this SECTION 7(D), the Purchaser
shall not be required to contribute, in the aggregate, any amount in excess of
the amount by which the proceeds actually received by the Purchaser from the
sale of the Registrable Securities subject to the Proceeding exceeds the amount
of any damages that the Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
8. RULE 144
The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act in a timely manner and, if at any
time the Company is not required to file such reports, they will, upon the
request of any Holder, make publicly available other information so long as
necessary to permit sales of its securities pursuant to Rule 144. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144. Upon the
request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
9. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages
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would not provide adequate compensation for any losses incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. None of the Company nor any of
its subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, 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 in this Agreement or otherwise conflicts with the provisions hereof.
Except as set specifically forth in Schedule 3.1 to the Purchase Agreement, none
of the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person. Without limiting the generality of the foregoing, without the
written consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act
unless the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement.
(c) NO PIGGYBACK ON REGISTRATIONS. Except for as specified in
Schedule A annexed hereto, none of the Company nor any of its securityholders
(other than the Holders in such capacity pursuant hereto) may include securities
of the Company in the Registration Statement other than the Common Stock to be
issued under the Purchase Agreement, and the Company shall not enter into any
agreement providing any such right to any of its securityholders.
(d) ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together
with the Exhibits, Annexes and Schedules hereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters. This Agreement amends and restates in its entirety the Original
Registration Rights Agreement.
(e) 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 same shall be in writing and signed by the Company
and the Holders of at least a majority of the then outstanding Registrable
Securities; PROVIDED, HOWEVER, that, for the purposes of this sentence,
Registrable Securities that are owned, directly or indirectly, by the Company,
or an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
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(f) NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: Glasgal Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome &
▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Purchaser: Southbrook International Investments, Ltd.
c/o Trippoak Advisors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Aronsohn & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇
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If to any other Person who is then the registered Holder:
To the address of such Holder as it
appears in the stock transfer books of the
Company
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder.
(h) COUNTERPARTS. This Agreement may be executed in any number
of 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. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(i) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflicts of law.
The Company hereby irrevocably submits to the jurisdiction of any New York state
court sitting in the Borough of Manhattan in the City of New York or any federal
court sitting in the Borough of Manhattan in the City of New York (collectively,
the "NEW YORK COURTS") in respect of any Proceeding arising out of or relating
to this Agreement, and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, jurisdiction of the New York Courts.
The Company irrevocably waives to the fullest extent it may effectively do so
under applicable law any objection that it may now or hereafter have to the
laying of the venue of any such Proceeding brought in any New York Court and any
claim that any such Proceeding brought in any New York Court has been brought in
an inconvenient forum. Nothing herein shall affect the right of any Holder to
serve process in any manner permitted by law or to commence legal proceedings or
otherwise proceed against the company in any other jurisdiction.
(j) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by
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such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(l) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(m) SHARES HELD BY THE COMPANY AND ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than the Purchaser or transferees or successors or assigns
thereof if such Persons are deemed to be Affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
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SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
GLASGAL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: CEO
SOUTHBROOK INTERNATIONAL
INVESTMENTS, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-fact