EXHIBIT 4.2
APPENDIX A
TO
CONVERTIBLE PROMISSORY NOTE
RADYNE CORP.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
__________, 199_ by and between RADYNE CORP., a New York corporation (the
"COMPANY"), and [__________] (the "PURCHASER").
RECITALS
A. The Company is the maker of that certain Convertible Promissory Note
dated as of ____________, 1998 (the "Note"), which Note is convertible into
Common Stock, par value $.002, of the Company (the "Common Stock");
B. The Purchaser has exercised its right to convert the Note to Common
Stock and concurrently with the execution of this Agreement the Company is
issuing to the Purchaser [__________] shares of Common Stock (the "Shares").
C. Pursuant to the terms of the Note, the Company is required to execute
and deliver this Agreement with the Shares.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission of the
United States or any other United States federal agency at the time
administering the Securities Act.
"HOLDER" shall mean the Purchaser, and its transferees or assigns as
permitted by SECTION 11 HEREOF, holding Registrable Securities or securities
convertible into or exercisable for Registrable Securities.
"REGISTRABLE SECURITIES" means (i) the Shares and (ii) any shares of
Common Stock issued or issuable in respect of the Shares upon any stock split,
stock dividend, recapitalization, or similar event. Shares shall only be
treated as Registrable Securities if they (A) have not been sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction, or (B) are not able to be sold in a single transaction exempt
pursuant to Rule 144(k) from the registration and prospectus delivery
requirements of the Securities Act
so that all transfer restrictions and restrictive legends with respect thereto
are removed upon the consummation of such sale.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
"REGISTRATION EXPENSES" shall mean all expenses, excluding Selling
Expenses (as defined below) except as otherwise stated below, incurred by the
Company in complying with SECTION 2, SECTION 3 and SECTION 4 hereof, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company and
reasonable fees and disbursements of one counsel for the Holder selected by the
Holder and approved by the Company (which consent shall not be unreasonably
withheld), Blue Sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holder. Such expenses shall be borne by the Holder.
2. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. In the event the Company shall receive
a written request from Holders collectively holding at least twenty five percent
(25%) of the Registrable Securities on or after the maturity date of the Note
then held by all Holders of Registrable Securities at the time of such request
that the Company effect any registration, qualification or compliance with
respect to Registrable Securities having an aggregate proposed selling price of
not less than One Million Dollars ($1,000,000) (a "REGISTRATION NOTICE"), the
Company will, as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable Blue Sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request.
Notwithstanding the foregoing, the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this SECTION 2 (i) prior to the effective date of the Company's first registered
public offering of its stock or (ii) after the Company has effected one
registration pursuant to this SECTION 2 and such registrations have been
declared or ordered effective.
Subject to the foregoing clauses (i) and (ii), the Company shall file
a registration statement covering the Registrable Securities so requested to be
registered as soon as practicable,
2
after receipt of the request or requests of the Holder. Notwithstanding the
foregoing, the Company shall be entitled to defer for a reasonable period of
time, but not in excess of 120 days, the filing of any registration statement
otherwise required to be prepared and filed by it under this SECTION 2 if
(i) (A) the Company is at such time conducting or about to conduct an
underwritten public offering of its securities for its own account and the Board
of Directors of the Company determines in good faith that such offering by the
Company would be materially adversely affected by such registration requested by
the Holder(s), (B) the Company is pursuing an acquisition, merger,
reorganization, disposition or other similar transaction and the Board of
Directors of the Company determines in good faith that the Company's ability to
pursue or consummate such transaction would be materially adversely affected by
such registration requested by the Holder(s), or (C) the Company is in
possession of material nonpublic information concerning it or its business and
affairs and the Board of Directors of the Company determines in good faith that
the prompt public disclosure of such information in such registration requested
by the Holder(s) would have a material adverse effect on the Company; and (ii)
the Company so notifies the requesting Holder(s) within ten (10) days after the
Company's receipt of the Registration Notice from such Holder(s).
(b) UNDERWRITING. In the event that a registration pursuant to this
Section is for a registered public offering involving an underwriting, the
Company shall so advise the Holder as part of the notice given pursuant to
SECTION 2(A). In such event, the right of the Holder to registration pursuant
to this Section shall be conditioned upon the Holder's participation in the
underwriting arrangements required by this Section, and the inclusion of the
Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein. The Holder shall, together with
the Company, enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company, but subject
to the reasonable approval of the Holder. If the Holder disapproves of the
terms of any such underwriting, the Holder may elect to withdraw therefrom by
written notice to the Company and the managing underwriter. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
3. REGISTRATION ON FORM S-3.
(a) REQUEST FOR REGISTRATION. If at any timeon or after the maturity
date of the Note, or from time to time thereafter, the Holder requests that the
Company file a registration statement on Form S-3 (or any successor form to Form
S-3) for a public offering of Registrable Securities and the Company is a
registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder may reasonably request. Notwithstanding the foregoing, the Company shall
not be obligated to take any action pursuant to Section 2 and SECTION 3 more
than one (1) time per calendar year.
Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities so requested to be registered as
soon as practicable, after receipt of the request or requests of the Holder.
Notwithstanding the foregoing, the Company shall be entitled
3
to defer for a reasonable period of time, but not in excess of 120 days, the
filing or any other actions with respect to any registration statement otherwise
required to be prepared and filed by it under this SECTION 3 if (i) (A) the
Company is at such time conducting or about to conduct an underwritten public
offering of its securities for its own account and the Board of Directors of the
Company determines in good faith that such offering by the Company would be
materially adversely affected by such registration requested by the Holder(s),
(B) the Company is pursuing an acquisition, merger, reorganization, disposition
or other similar transaction and the Board of Directors of the Company
determines in good faith that the Company's ability to pursue or consummate such
transaction would be materially adversely affected by such registration
requested by the Holder(s), or (C) the Company is in possession of material
nonpublic information concerning it or its business and affairs and the Board of
Directors of the Company determines in good faith that the prompt public
disclosure of such information in such registration requested by the Holder(s)
would have a material adverse effect on the Company; and (ii) the Company so
notifies the requesting Holder(s) within ten (10) days after the Company's
receipt of the registration request from such Holder(s).
(b) UNDERWRITING. The substantive provisions of SECTION 2(B) shall
be applicable to each such registration initiated under this Section involving
an underwriting.
4. INCIDENTAL REGISTRATIONS.
(a) NOTICE OF REGISTRATION. If at any time on or after the maturity
date of the Note or from time to time thereafter the Company shall determine to
file a registration statement under the Securities Act for the general
registration of any of its securities to be sold for cash, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to stock option or other employee benefit plans or
(ii) a registration relating solely to a Commission Rule 145 transaction, the
Company will: (A) promptly give the Holders written notice thereof; and (B)
include in such registration (and any related qualification under Blue Sky laws
or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made within
twenty (20) days after receipt of such written notice from the Company, by the
Holder, subject to the terms of SECTION 4(B).
(b) UNDERWRITING. If the registration with respect to which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holder as a part of the written
notice given pursuant to SECTION 4(A). In such event, the right of the Holder
to registration pursuant to this Section shall be conditioned upon the Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. The Holder shall, together
with the Company, enter into an underwriting agreement in customary form with
the managing underwriter selected for such underwriting by the Company. If the
Holder disapproves of the terms of any such underwriting, the Holder may elect
to withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration.
4
Notwithstanding any provision contained herein to the contrary, if the
managing underwriter or underwriters of the registration in which the Company
gives notice under this SECTION 4 shall advise the Company in writing that, in
its opinion, the total amount of Registrable Securities that the Holder(s)
request to include in such registration, together with any other securities with
similar incidental or piggyback registration rights (collectively, the
"REQUESTED SECURITIES") would materially reduce the amount of securities to be
offered by the Company or interfere in any material respect with the offer of
the Company's securities, then the amount and kind of Requested Securities to be
offered for the accounts of any Holder whose shares of Requested Securities were
requested to be included in such registration shall be reduced pro rata with
respect to each such Holder to the extent necessary to reduce the total amount
of securities to be included in such registration to the amount recommended by
such managing underwriter or underwriters; PROVIDED, HOWEVER, that such
reduction shall not include the following: (i) if the registration initially
occurs at the insistence of the Company, shares to be issued by the Company; or
(ii) if the registration occurs due to a demand registration right, including
the Demand Registration provided in SECTION 2, shares of the Holder(s) making
that demand.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section prior to the effectiveness of such registration whether or not the
Holder has elected to include Registrable Securities in such registration;
provided, however, if the Holder elects to use its demand registration right
pursuant to SECTION 2, then such registration shall be governed by SECTION 2 and
it shall not be terminated.
5. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date hereof, the Company will not, without the prior written consent of holders
of two-thirds of the Registrable Securities, enter into any agreement with any
holder or prospective holder of any securities of the Company which allows such
holder or prospective holder of any securities of the Company to include such
securities in any registration filed under SECTION 2 hereof, unless, under the
terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of his
securities will not adversely affect the Holder's registration rights pursuant
to such SECTION 2.
6. EXPENSES OF REGISTRATION.
(a) REGISTRATION EXPENSES. The Company shall bear all Registration
Expenses incurred in connection with all registrations pursuant to SECTION 2 or
SECTION 4 hereof, and shall bear all Registration Expenses incurred in
connection with the first registration pursuant to SECTION 3. In the event the
Holder withdraws a Registration Notice, abandons a registration statement or,
following an effective registration pursuant to SECTION 2 hereof, does not sell
Registrable Securities, then all Registration Expenses in respect of such
Registration Notice shall be borne, at the Holder's option, either by the Holder
or by the Company (in which case, if borne by the Company, such withdrawn or
abandoned registration shall be deemed to be an effective registration for
purposes of SECTION 2(A)(II) hereof). The Holder shall bear all Registration
Expenses incurred in connection with the second and any subsequent registration
pursuant to SECTION 3.
5
(b) SELLING EXPENSES. Unless otherwise stated, all Selling Expenses
relating to securities registered on behalf of the Holders shall be borne by the
Holders pro rata on the basis of the number of shares so registered.
7. REGISTRATION AND QUALIFICATION. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
as promptly as is practicable:
(a) prepare and file with the Commission, as soon as practicable, and
use its best efforts to cause to become effective for a time period not to
exceed 90 days, a registration statement under the Securities Act relating to
the Registrable Securities to be offered on such form as the Holder, or if not
filed pursuant to SECTION 2 or SECTION 3 hereof, the Company, determines and for
which the Company then qualifies;
(b) prepare and file with the Commission such amendments (including
post-effective amendments) to such registration statement and the prospectus and
supplements used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
until the earlier of such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition set forth in
such registration statement or the expiration of ninety (90) days after such
registration statement becomes effective; provided that such ninety (90) day
period shall be extended in the case of a registration pursuant to SECTION 2 or
SECTION 3 hereof for such number of days that equals the number of days elapsing
from (i) the date the written notice contemplated by SECTION 7(F) hereof is
given by the Company to (ii) the date on which the Company delivers to the
Holder the supplement or amendment contemplated by SECTION 7(F) hereof;
(c) furnish to the Holder and to any underwriter of Registrable
Securities such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such
other documents, as the Holder or such underwriter may reasonably request;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of such registration statement at the
earliest possible moment;
(e) if requested by the Holder, (i) furnish to the Holder an opinion
of counsel for the Company addressed to the Holder and dated the date of the
closing under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement), and (ii)
use its best efforts to furnish to the Holder a "comfort" or "special
procedures" letter addressed to the Holder and signed by the independent public
accountants who have audited the Company's financial statements included in such
registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in
6
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Holder may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) immediately notify the Holder in writing (i) at any time when a
prospectus relating to a registration hereunder is required to be delivered
under the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits 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, and (ii)
of any request by the Commission or any other regulatory body or other body
having jurisdiction for any amendment of or supplement to any registration
statement or other document relating to such offering, and in either such case
(i) or (ii) at the request of the Holder prepare and furnish to the Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statement therein, in light of the
circumstances under which they are made, not misleading;
(g) use its best efforts to list all such Registrable Securities
covered by such registration statement on each securities exchange and
inter-dealer quotation system on which a class of common equity securities of
the Company is then listed, and to pay all fees and expenses in connection
therewith; and
(h) upon the transfer of Shares by the Holder in connection with a
registration hereunder, furnish unlegended certificates representing ownership
of the Registrable Securities being sought in such denominations as shall be
requested by the Holder or the underwriters.
8. INDEMNIFICATION.
(a) BY THE COMPANY. The Company will indemnify the Holders, their
respective officers, directors, partners, legal counsel and accountants, and
each person controlling any Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statementor prospectus, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein 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,
or any violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
7
with any such registration, qualification or compliance, and the Company will
reimburse the Holder, its officers, directors and partners, each person
controlling the Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by the
Holder, controlling person or underwriter and stated to be specifically for use
therein. If the Holder is represented by counsel other than counsel for the
Company, the Company will not be obligated under this SECTION 8(A) to reimburse
legal fees and expenses of more than one separate counsel for the Holder.
(b) BY THE HOLDER. The Holder will indemnify the Company, its
directors, officers, legal counsel, accountants, each underwriter, if any, of
the Company's securities covered by such a registration statement, and each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statementor prospectus, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such directors, officers, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement or prospectus in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by the
Holder and stated to be specifically for use therein. Notwithstanding the
foregoing, the liability of the Holder under this subsection (b) shall be
limited in an amount equal to the net proceeds of the shares sold by the Holder,
unless such liability arises out of or is based on willful misconduct by the
Holder.
(c) PROCEDURE FOR INDEMNIFICATION. Each party indemnified under
paragraph (a) or (b) of this SECTION 8 (the "INDEMNIFIED PARTY") shall, promptly
after receipt of notice of any claim or the commencement of any action against
such Indemnified Party in respect of which indemnity may be sought, notify the
party required to provide indemnification (the "INDEMNIFYING PARTY") in writing
of the claim or the commencement thereof; provided that the failure of the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which it may have to an Indemnified Party
on account of the indemnity agreement contained in paragraph (a) or (b) of this
SECTION 8, unless the Indemnifying Party was materially prejudiced by such
failure, and in no event shall relieve the Indemnifying Party from any other
liability which it may have to such Indemnified Party. If any such claim or
action shall be brought against an Indemnified Party, it shall notify the
Indemnifying Party thereof and the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After
8
notice from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of such claim or action, the Indemnifying Party shall not be
liable (except to the extent the proviso to this sentence is applicable, in
which event it will be so liable) to the Indemnified Party under this SECTION 8
for any legal or other expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation; provided that each Indemnified Party shall have the right to
employ separate counsel to represent it and assume its defense (in which case,
the Indemnifying Party shall not represent it) if (i) upon the advice of
counsel, the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, or
(ii) in the event the Indemnifying Party has not assumed the defense thereof
within ten (10) days of receipt of notice of such claim or commencement of
action, and in which case the fees and expenses of one such separate counsel
shall be paid by the Indemnifying Party. If any Indemnified Party employs such
separate counsel it will not enter into any settlement agreement which is not
approved by the Indemnifying Party, such approval not to be unreasonably
withheld. If the Indemnifying Party so assumes the defense thereof, it may not
agree to any settlement of any such claim or action as the result of which any
remedy or relief, other than monetary damages for which the Indemnifying Party
shall be responsible hereunder, shall be applied to or against the Indemnified
Party, without the prior written consent of the Indemnified Party. In any
action hereunder as to which the Indemnifying Party has assumed the defense
thereof with counsel reasonably satisfactory to the Indemnified Party, the
Indemnified Party shall continue to be entitled to participate in the defense
thereof, with counsel of its own choice, but, except as set forth above, the
Indemnifying Party shall not be obligated hereunder to reimburse the Indemnified
Party for the costs thereof.
If the indemnification provided for in this Section shall for any
reason be unavailable to an Indemnified Party in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each Indemnifying Party shall, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Indemnifying Party on the one hand or the Indemnified Party on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission, but not by
reference to any Indemnified Party's stock ownership in the Company. In no
event, however, shall the Holder of Registrable Securities be required to
contribute in excess of the amount of the net proceeds received by the Holder in
connection with the sale of Registrable Securities in the offering which is the
subject of such loss, claim, damage or liability. The amount paid or payable by
an Indemnified Party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this paragraph shall be deemed
to include, for purposes of this paragraph, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. No person guilty of
9
fraudulent misrepresentation (within the meaning of Section 12(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
9. INFORMATION FROM THE HOLDERS. Notwithstanding any provision contained
herein to the contrary, it shall be a condition precedent to the obligation of
the Company to take any action pursuant to this Agreement in respect of the
Registrable Securities that are to be registered at the request of any Holder
thereof that (i) such Holder furnish to the Company such information regarding
the Holder as shall be necessary to enable the Company to comply with the
provisions hereof in connection with any registration, qualification or
compliance referred to in this Agreement, and (ii) such Holder deliver and
perform under any underwriting and selling shareholder agreements as may be
reasonably requested by the underwriters.
10. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT");
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and
(c) Furnish to any Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as the Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
11. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities under SECTION 2, SECTION 3 or SECTION 4 may be assigned in
connection with any transfer or assignment by the Holder of Registrable
Securities provided that: (a) such transfer may otherwise be effected in
accordance with applicable securities laws; (b) such transfer is effected in
compliance with the restrictions on transfer contained in this Agreement and in
any other agreement between the Company and the Holder; and (c) such assignee or
transferee acquires at least 25% of the Registrable Securities then outstanding
and shall execute a counterpart of this Agreement whereby such assignor or
transferee agrees to be bound by the terms of this Agreement and assumes all of
the obligations of the transferring Holder hereunder.
10
No transfer or assignment will divest the Holder or any subsequent owner of such
rights and powers unless all Registrable Securities are transferred or assigned.
12. TERMINATION. This Agreement shall terminate at such time as all
Registrable Securities held by the Holders constitute less than one percent (1%)
of the voting securities of the Company (on an as-converted basis) and can be
sold pursuant to Rule 144, other than Rule 144(k), within a consecutive three
(3) month period without compliance with the registration requirements of the
Securities Act. The respective indemnities, representations and warranties of
the Purchaser and the Company shall survive such termination.
13. MARKET STAND-OFF. If requested by an underwriter of securities of the
Company, each Holder of Registrable Securities shall not sell or otherwise
transfer or dispose of any Registrable Securities held by such Holder during the
one-hundred twenty (120) day period following the effective date of a
registration statement; provided, however, that such agreement shall apply only
to the first registration statement covering the offered securities to be sold
on the Company's behalf to the public in an underwritten offering.
14. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the State of California without given effect to the conflicts
of law principles thereof.
(b) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder of
at least two-thirds (2/3) of the Registrable Securities, voting as a class. Any
amendment or waiver effected in accordance with this paragraph will be binding
upon the Company, each holder of any securities purchased under this Agreement
at the time outstanding (including securities into which such securities are
convertible), and any transferee of such securities.
(c) SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
invalid, unenforceable or void, this Agreement shall continue in full force and
effect without said provision. In such event, the parties shall negotiate, in
good faith, a legal, valid and binding substitute provision which most nearly
effects the intent of the parties in entering into this Agreement.
(d) NOTICES. All notices and other communications required or
permitted hereunder shall be in writing (or in the form of a telex or telecopy
(confirmed in writing) to be given only during the recipient's normal business
hours unless arrangements have otherwise been made to receive such notice by
telex or telecopy outside of normal business hours) and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand,
messenger, or telex-or telecopy (as provided above) addressed (a) if to the
Purchaser, at such address as the Purchaser shall have furnished to the Company
in writing or (b) if to the Company, one copy should be sent to its principal
executive offices and addressed to the
11
attention of the Corporate Secretary, or at such other address as the Company
shall have furnished to the Purchaser.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid, or, if
by telex or telecopy pursuant to the above, when received.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(f) CAPTIONS. The section captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
RADYNE CORP., a New York corporation
By:
-------------------------------------
Its:
------------------------------------
[ADD PURCHASER]
12
