Exhibit 10.8
SECURITIES PURCHASE AGREEMENT
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THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is entered into as of
October 24, 1996, by and between SYQUEST TECHNOLOGY INTERNATIONAL, Grand Cayman
corporation ("Sub"), SYQUEST TECHNOLOGY, INC., a Delaware corporation that owns
all of the issued and outstanding capital stock of Sub ("Parent"), and SAE
Magnetics (HK) LTD. corporation ("Purchaser"), with reference to the following
facts:
A. Sub has failed to make payments to Purchaser when due for products
manufactured and delivered by Purchaser pursuant to the purchase orders and
related invoices (the "Purchase Orders") listed on Schedule A to this
Agreement in the aggregate amount of $6,080,397.22 (the "Purchaser Order
Amount").
B. In consideration of cancellation of the amounts owed to Purchaser equal to
the sum of the Purchase Order Amount, Parent will issue to Purchaser shares
of the Common Stock of Parent, to repay the amounts due to Purchaser with
such shares, valued at the last sale price (the "Closing Price") as
reported in the Nasdaq National Market on the last trading day preceding
the Closing Date (as that term is defined below), but in no event shall
Parent be obligated to issue hereunder in excess of 1,020,000 of its Common
Stock.
C. Parent will execute and deliver to Purchaser that certain Registration
Rights Agreement dated as of the date hereof (the "Registration Rights
Agreement") in further consideration of the agreements of Purchaser herein.
In consideration of the premises and the mutual covenants and conditions
herein, the parties hereby agree as follows:
1. Purchase Order Amount. Sub acknowledges that Sub owes Purchaser the
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Purchase Order Amount shown on Schedule A attached hereto and
incorporated herein by reference, for products manufactured and
delivered by Purchaser to Sub in response to the Purchase Orders
issued by Sub to Purchaser, and that notwithstanding any payment or
credit term contained in the Purchase Orders, the Purchase Order
Amount is currently due and payable in full. If any such product
shipped to Sub is defective, Sub and Parent shall have the right to
return such product to and request delivery of substitute product from
Purchaser and if such substitute product is not delivered, the
Purchase Order Amount, to the extent not then paid or discharged
hereunder or otherwise, shall be reduced accordingly, or if the
Purchase Order Amount shall then have been paid or otherwise
discharged in full, the cost thereof shall forthwith be credited by
Purchaser to Sub and/or Parent against future purchases as disgnated
by Sub and/or Parent.
2. Payment.
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(a) Issuance of Shares. Parent shall issue to Purchaser on the
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Closing Date the number of shares of Parent's Common Stock equal
to the quotient of the Purchase Order Amount (as it shall then
have been reduced under section 1) divided by the Closing Price,
rounded down to the nearest lower whole number of shares, but in
no event shall Parent be required to issue hereunder in excess of
1,020,000 shares of its Common Stock. Such shares are hereinafter
called the "Shares".
(b) Payment of Balance. If Parent is unable to issue the full number
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of Shares necessary to repay the Purchase Order Amount due to the
limit on the number of Shares provided in section 2(a), Parent
shall pay the balance due (the "Balance"), to Purchaser as
follows:
(i) If the Balance is not more than $50,000, the full
amount of the Balance shall be paid by Sub to Purchaser
on the Closing Date, by check or wire transfer;
(ii) If the Balance is more than $50,000 but not more than
$100,000, the Balance shall be paid by Sub by check or
wire transfer to Purchaser in three equal installments
of principal and interest (at the annual rate of ten
percent), one such installment to be paid on each of
the Closing Date, the 90th day after the Closing Date,
and the 150th day after the Closing Date; and
(iii) If the Balance is more than $100,000, the Balance shall
be paid by Sub to Purchaser (with interest at the
annual rate of ten percent) over a period of not less
than twelve months, with the payment schedule to be
determined by mutual agreement of Parent and Purchaser.
(c) Extinguishment of Indebtedness. On the Closing Date, Parent and
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Sub shall be deemed to have paid and discharged all or a portion
of the Purchase Order Amount equal to the product of the number
of Shares multiplied by the Closing Price. Purchaser agrees that,
except to the extent of the unpaid Balance, if any, Parent and
Sub shall be deemed to have paid and discharged the Purchase
Order Amount in full on the Closing Date. If, after the Closing
Date, any Balance remains unpaid, Parent and Sub shall be deemed
to have paid and discharged the Purchase Order Amount in full on
payment of the final installment of the Balance.
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3. Representations and Warranties of Parent and Sub. Parent and Sub
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hereby represent and warrant to Purchaser as follows:
(a) Corporate Existence and Power. Parent is a corporation duly
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organized and existing, and in good standing, under the laws of
the State of Delaware and has all requisite corporate power to
execute and deliver this Agreement and the Registration Rights
Agreement, to issue the Shares pursuant hereto and otherwise to
carry out and perform its obligations under the terms of this
Agreement. To the best knowledge of the current executive
officers of Parent, without having conducted an investigation of
the records of Parent or Sub, Sub is a corporation duly organized
and existing under the laws of Grand Cayman and in good standing
under such laws, and Sub has all requisite corporate power to
execute and deliver this Agreement and otherwise to carry out and
perform its obligations under this Agreement.
(b) Corporate Action; Enforceability. All corporate action on the
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part of Parent necessary for the execution, delivery and
performance of this Agreement and the Registration Rights
Agreement and the issuance of Shares pursuant hereto has been
taken, and this Agreement and the Registration Rights Agreement
constitute valid and binding obligations of Parent enforceable
against Parent in accordance with their respective terms. To the
best knowledge of the current executive officers of Parent,
without having conducted an investigation of the records of
Parent or Sub, all corporate action on the part of Sub necessary
for the execution, delivery and performance by Sub of this
Agreement has been taken, and this Agreement constitutes valid
and binding obligations of Sub enforceable against Sub in
accordance with its terms.
(c) Valid Issuance. The Shares, when issued in compliance with this
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Agreement, will be validly issued, fully paid, nonassessable and
free of any restrictions on transfer other than pursuant to
applicable state, federal and foreign securities laws.
(d) SEC Documents. Parent has furnished to Purchaser true and
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complete copies of its Annual Report on Form 10-K for the fiscal
year ended September 30, 1995, as amended on Form 10-K/A, its
Quarterly Reports on Form 10-Q for the quarters ended December
31, 1995, March 31, 1996, and June 30, 1996, its Current Report
on Form 8-K dated June 14, 1996, and its Amendment to Form S-3
filed on August 29, 1996, in each case as filed with the
Securities and Exchange Commission (the "SEC"). Such Reports are
hereinafter collectively called the "Reports". To the best
knowledge of the current executive officers of Parent, without
having conducted an investigation of the records of Parent or
Sub, as of their respective filing dates (except as thereafter
amended), the
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Reports complied in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(e) No Contravention. To the best knowledge of the current executive
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officers of Parent, without having conducted an investigation of
the records of Parent or Sub, neither the execution and delivery
of this Agreement by Parent or Sub nor the consummation of the
transactions contemplated hereby will (i) conflict with, or
result in any breach or violation of, any provision of the
certificate of incorporation or by-laws of Parent or Sub; (ii)
constitute, with or without notice or the passage of time or
both, a material breach, violation or default under any order,
writ, injunction, decree, law, statute, rule or regulation,
governmental permit or license of Parent or Sub or to which
either of their properties is subject; or (iii) except as
provided in the Registration Rights Agreement, require any
consent, approval or authorization of, notification to, or filing
with, any court, governmental agency or regulatory or
administrative authority on the part of Parent or Sub, except for
filings under the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act and the Nasdaq National
Market rules.
(f) Exemption from Registration. Assuming the accuracy and
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completeness of the representations and warranties in section 4,
the offer, sale and issuance of the Shares as contemplated by
this Agreement are exempt from the registration requirements of
the Securities Act.
4. Representations and Warranties of Purchaser. Purchaser represents and
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warrants to Parent and Sub as follows:
(a) Authority. Purchaser has the full power and authority to execute
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and deliver this Agreement and the Registration Rights Agreement
and to perform its obligations hereunder and thereunder.
(b) Enforceability. This Agreement and the Registration Rights
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Agreement are valid and binding agreements of Purchaser
enforceable against Purchaser in accordance with their respective
terms.
(c) Securities Laws Representations. Purchaser is acquiring the
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Shares for Purchaser's own account and not with a view to or for
sale in connection with any distribution. Purchaser has such
knowledge and experience in financial and business matters that
Purchaser is capable of evaluating the merits and risks of its
investment in the Shares, is able to bear the economic risk of
such investment and is able to protect the Purchaser's own
interests in connection with this transaction. Purchaser
acknowledges having had access to such information concerning
Parent. Sub and their affiliates as Purchaser deems
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necessary to enable Purchaser to an informed decision concerning
an investment in the ▇▇▇▇▇▇.▇▇ entering into this Agreement and
consummating the transactions contemplated hereby, Purchaser is
relying solely on its own investigation of Parent, Sub and their
affiliates and their businesses, management, financial condition,
properties and prospects and the merits and risks of such
transactions. Purchaser is aware that the Shares have not been
registered under the Securities Act and the Shares may not be
transferred by Purchaser unless they are subsequently registered
under the Securities Act or an exemption from such registration
is available. The Shares shall not be transferred without
registration under the Securities Act or an applicable exemption
therefrom. Purchaser is an accredited investor as that term is
defined in Rule 501(a) of Regulation D promulgated by the SEC
under the Securities Act. Purchaser acknowledges that until the
Shares are sold pursuant to registration under the Securities Act
or an available exemption therefrom, all certificates
representing Shares shall bear the following legend:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT AND EXEMPTION FROM ALL APPLICABLE
STATE SECURITIES LAWS, AS CONFIRMED BY THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY.
5. Additional Representation. Each of Parent and Sub jointly and
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severally represent and warrant to Purchaser and Purchaser represnts
and warrants to Parent and Sub that it is the sole and lawful owner of
all right, title and interest in and to all of the claims related to
the Purchase Orders and that it has not heretofore voluntarily, by
operation of law or otherwise, assigned or transferred or purported to
assign or transfer to any person whomsoever any such claim.
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6. Closing.
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(a) The issuance of the Shares shall take place on the date hereof or
on such later date as the conditions in section 6(b) shall have
been satisfied or waived (the "Closing Date"), and shall be
consummated by mail or otherwise in accordance with arrangements
reasonably acceptable to Parent and Purchaser. On the Closing
Date, Parent shall deliver to Purchaser a certificate
representing the Shares and a check for all or part of the
Balance, if any, to be paid on the Closing Date pursuant to
section 2(b) above, in payment, discharge and cancellation of
indebtedness equal to part or all of the Purchase Order Amount as
provided in section 2(c).
(b) The obligations of Parent to issue and sell the Shares and to
perform its other obligations hereunder shall be subject to the
satisfaction as determined by, or waiver by, Parent of the
following conditions on or before the Closing Date:
(i) The representations and warranties of Purchaser in
sections 4 and 5 shall be true and correct on the
Closing Date as if made on such date; and
(ii) A Notification Form of Listing of Additional Shares
shall have been filed with Nasdaq with respect to the
Shares at least fifteen days prior to the Closing Date.
7. General Provisions.
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(a) Successors. This Agreement shall bind and inure to the benefit
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of the parties hereto and their respective successors and
assigns.
(b) Governing Law. Any action or proceeding to interpret, construe
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or enforce this Agreement may be instituted and prosecuted only
in a state court located in Alameda County, State of California,
or, if requisite jurisdiction exists, in the United States
District Court for the Northern District of California. This
Agreement shall be governed by and interpreted and construed in
accordance with the laws of the State of California.
(c) Entire Agreement. This Agreement and Registration Rights
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Agreement constitute the entire agreement of the parties and
supersede all prior or contemporaneous agreements,
communications, negotiations and understandings, written or oral,
between the parties, regarding the subject matter hereof and
thereof.
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(d) Waiver, Modification, or Amendment. No waiver, modification or
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amendment of this Agreement shall be enforceable unless in
writing and executed by the party against whom such waiver,
modification or amendment is claimed.
(e) Severability. If any provision of this Agreement is held to be
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illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions shall not be affected
or impaired.
(f) Attorneys' Fees. In the event of litigation or other proceedings
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in connection with or related to this Agreement, the prevailing
party in such litigation or proceedings shall be entitled to
reimbursement from the opposing party of all reasonable expenses,
including, without limitation, reasonable attorneys' fees and
expenses and expenses of investigation in connection with such
litigation or proceedings.
(g) Currency. All dollar amounts are expressed in U.S. Dollars.
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(h) Communications and Notices. All notices and other communications
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required or permitted hereunder shall be in writing in the
English language and shall be deemed duly delivered and received
when delivered personally, when transmitted by facsimile if
receipt is acknowledged by the addressee, two days after being
deposited for next-day or second-day delivery with an
internationally recognized overnight or two-day delivery service,
or four days after being deposited as first class mail with the
United States Postal Service, properly addressed as follows:
If to Parent or Sub: SyQuest Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: SAE Magnetics (HK) LTD.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address or facsimile number set forth
above by giving written notice thereof to the other party in the
manner prescribed herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as the day and the year first
set forth above.
SYQUEST TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
SYQUEST TECHNOLOGY INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
SAE MAGNETICS (HK) LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇
Title: Vice President
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AGREEMENT
This agreement ("Agreement" is entered into this 15 day of October, 1996,
by and between SyQuest Technology, Inc. ("Vendee") and SAE Magnetics (H.K.) Ltd.
("Vendor").
WHEREAS, Vendee is indebted to Vendor in the amount of $6,080,397.22 (the
"Claim") of which $1,506,788.96 is for payment of the promise shown on Exhibit A
hereto to be delivered to the Vendor within thirty (30) days of the effective
date of the Agreement.
WHEREAS, neither Vendor or Vendee desire to engage in costly and time
consuming litigation to determine their respective rights against each other;
and,
WHEREAS, Vendor desires to enter into this Agreement so that payments on
the account of the Claim can begin without delay.
NOW THEREFORE, in consideration of the above (which is hereby incorporated
into and shall be deemed a part of this Agreement), and of the covenants and
agreements hereinafter set forth, and of other goods and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties, it
is agreed by and between the parties as follows:
1. In accordance with the terms of the Promissory Note to be executed by
Vendee, substantially for the form of Exhibit B hereto, Vendee shall pay to the
order of Vendor the Claim amount in equal monthly installments of $304,019.86 on
account of principle and interest over a period of twenty-four (24) months.
Monthly payments will commence on October 15, 1996. Interest shall accrue at the
rate of ten percent (10%) per annum commencing on October 15, 1996. Each monthly
payment will be applied first to payment of interest.
2. Until such time, if ever, as an Event of Default (as defined below)
exists, Vendor agrees to forebear from enforcing its rights, if any, to collect
or enforce the Claim, or to create, perfect or enforce any lien against the
property of Vendee, or its affiliates with respect to the Claim, or otherwise
take any action against Vendee or its affiliates. Not withstanding, the
foregoing sentence, Vendor shall not be limited with regard to enforcing its
rights relating to any claim, course of action, or rights after the execution of
this Agreement unrelated to the Claim.
3. Only upon the occurrence of the following shall there exist an Event
of Default under this Agreement: Vendee's failure to make a payment hereunder,
provided such payment is not cured within ten (10) working days following
written notice given by Vendor to Vendee that its payment has not been received.
4. (a) Upon the occurrence of an Event of Default, the entire unpaid
principle balance of the Claim, together with interest thereon at the rate
specified herein, shall, as the option of the holder hereof, become immediately
due and payable. Vendee agrees to pay the holder hereof all costs and expenses
incurred in connection with the collection hereof, including reasonable
attorneys' fees.
(b) Vendee waives any rights of set-off against the Claim and agrees
that it shall not assent any counterclaim in any action or proceeding to enforce
the Claim, hereby acknowledges that the obligations hereunder are fixed and
unconditional.
5. Any notice to be given to either party under this Agreement shall be
written in the English language and shall be effective when delivered to the
other party (which may be made by facsimile transmission or telegram) as
follows:
If to Vendor: SyQuest Technology, Inc. If to Vendor: SAE Magnetics (H.K.) Ltd.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SAE Tower, ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, New Territories, Hong Kong
Attn: ▇▇▇▇ ▇. Luhtola
Fax (▇▇▇) ▇▇▇-▇▇▇▇ Fax (▇▇▇) ▇▇▇▇-▇▇▇▇
Copy to:
TOR U.S.A. Corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Director of Finance
Fax (▇▇▇) ▇▇▇-▇▇▇▇
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
7. Vendor and Vendee warrant that they are authorized to enter into this
Agreement.
8. This Agreement embodies the entire agreement and understanding between
the parties pertaining thereon, and supercedes all previous agreements,
understandings, negotiations, representatives and discussions, whether verbal or
written of the parties, pertaining thereto.
9. This Agreement may be amended, modified or supplemented only by a
writing executed by each of the parties. No waiver by any party of a breach of
any provision of this Agreement shall be construed as a waiver of any subsequent
or differing breach.
SyQuest Technology, Inc. SAE Magnetics (H.K.) Ltd.
By:_______________________ By: /s/ ▇▇▇▇ ▇▇▇▇
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Its:______________________ Its: Vice President
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Date:_____________________ Date: October 15, 1996
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of October
24, 1996, by and among SyQuest Technology, Inc., a Delaware corporation (the
"Company"), and SAE Magnetics (HK) LTD. (the "Buyer"), with reference to the
following facts:
In connection with the Securities Purchase Agreement by and among the Buyer
the Company and a subsidiary of the Company of even date herewith (the
"Securities Purchase Agreement"), the Company has agreed, on the terms and
subject to the conditions of the Securities Purchase Agreement, to issue and
sell to the Buyer shares of the Company's Common Stock, par value $.001 per
share. To induce the Buyer to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Buyer hereby agree as
follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
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have the respective meanings respectively ascribed to them in the Securities
Purchase Agreement. As used in this Agreement, the following terms have the
following meanings:
1.1 "Investor" means the Buyer and any transferee or assignee thereof
to whom the Buyer assigns this Agreement and who agrees to become a party to and
be bound by this Agreement in accordance with section 9.
1.2 "Register", "registered", and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
1.3 "Registrable Securities" means the Shares.
1.4 "Registration Statement" or "Registration Statements" means a
registration statement or statements of the Company filed under the 1933 Act.
2. REGISTRATION.
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2.1 Mandatory Registration. The Company shall use its best efforts to
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prepare and, on or before forty-five days after the date of the issuance of the
Shares, file with
the SEC a Registration Statement or Registration Statements (as is necessary) on
Form S-3 (or, if such form is unavailable for such a registration, on such other
form as is available for such a registration) (any of which may contain a
combined prospectus with other registrations by the Company), covering the
resale of the Registrable Securities. The Registration Statement(s) (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to and approved by the Buyer and its
counsel prior to its filing or other submission, which approval shall not to be
unreasonably withheld.
2.2 Underwritten Offering. If any offering pursuant to a Registration
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Statement pursuant to section 2.1 involves an underwritten offering, the
Investors who hold a majority of the Registrable Securities subject to such
underwritten offering shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer their
interest in the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company.
2.3 Piggy-Back Registrations. If at any time prior to the expiration
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of the Registration Period (as hereinafter defined) the Company shall file with
the SEC a Registration Statement relating to an offering for its own account or
the account of others under the 1933 Act of any of its equity securities (other
than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans) the Company shall send to each Investor who is
entitled to registration rights under this section 2.3 written notice of such
determination and, if within twenty days after receipt of such notice, such
Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock that may be included in the Registration Statement because, in such
underwriter(s)' good faith judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder; provided that no portion of the equity securities
that the Company is offering for its own account shall be excluded; and provided
further that the Company shall be entitled to exclude Registrable Securities to
the extent necessary to avoid breaching obligations existing prior to the date
hereof to other stockholders of the Company. Any exclusion of Registrable
Securities shall be made pro rata among the Investors seeking to include
Registrable Securities, in proportion to the number of Registrable Securities
sought to be included by such Investors; provided that the Company shall not
exclude any Registrable Securities unless the Company has first excluded all
outstanding securities held by persons that are not entitled to inclusion of
such securities in such Registration Statement or are not entitled to pro rata
inclusion with the Registrable Securities; and provided further that, after
giving effect to the preceding proviso, any exclusion of Registrable Securities
shall be made pro rata with holders of other securities having the right to
include such securities in the Registration Statement other than holders of
securities entitled to inclusion of their securities in such Registration
Statement by reason of demand registration rights or whose registration rights
existed prior to the date hereof. No right to registration of Registrable
Securities under this
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section 2.3 shall be construed to limit any registration required under section
2.1. The obligations of the Company under this section 2.3 may be waived by
Investors holding a majority of the Registrable Securities. If an offering in
connection with which an Investor is entitled to registration under this Section
2.3 is an underwritten offering, each Investor whose Registrable Securities are
included in such Registration Statement shall, unless otherwise agreed by the
Company, offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to all provisions of
this Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering.
2.4 Eligibility for Form S-3. The Company represents and warrants
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that it meets the requirements for the use of Form S-3 for registration of the
sale by the Buyer and any other Investor of the Registrable Securities, and the
Company shall file all reports required to be filed by the Company with the SEC
in a timely manner to maintain such eligibility for the use of Form S-3. If Form
S-3 is not available for sale by the Investors of the Registrable Securities,
the Company shall register the sale on another appropriate form.
3. REGISTRATION OBLIGATIONS.
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3.1 Registration Statements. The Company shall use its best efforts
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to cause such Registration Statement(s) relating to Registrable Securities to
become effective as soon as possible after the filing thereof, and keep the
Registration Statement(s) effective pursuant to Rule 415 at all times until the
earliest of (a) the date as of which the Investors may sell all of the
Registrable Securities without registration pursuant to Rule 144 promulgated
under the 1933 Act, (b) the second anniversary of the date hereof, and (c) the
date on which the Investors shall have sold all the Registrable Securities (the
"Registration Period"). Such Registration Statement(s) (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
3.2 Amendments and Supplements. The Company shall prepare and file
--------------------------
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement(s) and the prospectus(es) used in
connection with the Registration Statement(s) as may be necessary to keep the
Registration Statement(s) effective at all times during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act with respect
to the disposition of all Registrable Securities of the Company covered by the
Registration Statement(s) until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement(s).
3.3 Prospectus Delivery. The Company shall furnish to each Investor
-------------------
whose Registrable Securities are included in the Registration Statement(s) and
its legal counsel (a) promptly after the same is prepared and publicly
distributed, filed with the SEC or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto, and (b) such number of
copies of a prospectus, including a preliminary prospectus, and all amendments
and
3
supplements thereto and such other documents as such Investor may reasonably
request to facilitate the disposition of the Registrable Securities owned by
such Investor.
3.4 Blue Sky Laws. The Company shall use reasonable efforts to (a)
-------------
register and qualify the Registrable Securities covered by the Registration
Statement(s) under such other securities or "blue sky" laws of such
jurisdictions in the United States as the Investors who hold a majority of the
Registrable Securities being offered reasonably request (but in no event in more
than five states of the United States), (b) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (c) take such
other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (d)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided that the Company
shall not be required in connection therewith or as a condition thereto to (1)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this section 3.4, (2) subject itself to general
taxation in any such jurisdiction, (3) file a general consent to service of
process in any such jurisdiction, (4) provide any undertakings that cause more
than nominal expense or burden to the Company, or (5) make any change in its
certificate of incorporation or bylaws, which the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders.
3.5 Underwriting Agreement. If Investors who hold a majority of the
----------------------
Registrable Securities being offered in the offering select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.
3.6 Corrections. As promptly as practicable after becoming aware of
-----------
such event, the Company shall notify each Investor of the happening of any
event, of which the Company has knowledge, as a result of which the prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request.
3.7 Stop Orders. The Company shall use its best efforts to prevent
-----------
the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, use its best efforts to
obtain the withdrawal of such order at the earliest possible moment and to
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance of
such order and the resolution thereof.
4
3.8 Selling Stockholders' Counsel. The Company shall permit a
-----------------------------
single firm of counsel, designated as selling stockholders' counsel by the
Investors who hold a majority of the Registrable Securities being sold, to
review and comment on the Registration Statement(s) and all amendments and
supplements thereto a reasonable period prior to their filing with the SEC, and
shall not file any document in a form to which such counsel reasonably objects.
3.9 Comfort Letter and Opinion. At the request of Investors who
--------------------------
hold a majority of the Registrable Securities being sold, the Company shall
furnish, on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the Registration Statement (a)
if required by an underwriter, a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, and (b) an opinion,
dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in such form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and the Investors.
3.10 Due Diligence. The Company shall make available for
-------------
inspection by any Investor, any underwriter participating in any disposition
pursuant to a Registration Statement, one firm of attorneys and one firm of
accountants or other agents retained by the Investors, and one firm of attorneys
retained by all such underwriters (collectively, the "Inspectors"), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall be reasonably
deemed necessary by such Inspector to enable such Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information that any Inspector may reasonably request
for purposes of such due diligence; provided that each Inspector shall hold in
strict confidence and shall not make any disclosure (except to an Investor) or
use of any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, consistent with and implementing the
confidentiality obligations of this section 3.10. Each Investor agrees that it
shall, on learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow and cooperate with the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.
3.11 Listing. The Company shall use its best efforts either to (a)
-------
cause all the Registrable Securities covered by a Registration Statement to be
listed on each national securities exchange on which the Common Stock is then
listed, if any, if the listing of such
5
Registrable Securities is then permitted under the rules of such exchange, or
(b) secure designation and quotation of all the Registrable Securities covered
by the Registration Statement on the Nasdaq National Market or, if, despite the
Company's best efforts to satisfy the preceding clause (a) or (b), the Company
is unsuccessful in satisfying the preceding clause (a) or (b), to secure the
inclusion for quotation on the Nasdaq SmallCap Market for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities.
3.12 Certificates. The Company shall cooperate with the Investors
------------
who hold Registrable Securities being offered and, to the extent applicable, any
managing underwriter or underwriters, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or, if there is no
managing underwriter or underwriters, the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters, if any, or
the Investors may request.
3.13 Other Action. The Company shall take all other reasonable
------------
actions necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement.
4. OTHER OBLIGATIONS OF THE INVESTORS.
----------------------------------
4.1 Investor Information. At least five days prior to the first
--------------------
anticipated filing date of the Registration Statement, the Company shall notify
each Investor of the information the Company requires from each such Investor
that elects to have any of such Investor's Registrable Securities included in
the Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of an Investor that such
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
4.2 Cooperation. Each Investor by such Investor's acceptance of the
-----------
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement(s) hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement.
4.3 Underwriting Agreement. If Investors holding a majority of the
----------------------
Registrable Securities being registered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and
6
take such other actions as are reasonably required to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor notifies the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement(s).
4.4 Corrections. Each Investor agrees that, on receipt of any
-----------
notice from the Company of the happening of any event of the kind described in
section 3.6 or 3.7, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement(s) covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by section 3.6 or 3.7 and, if so
directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
4.5 Underwriting Arrangements. No Investor may participate in any
-------------------------
underwritten registration hereunder, unless such Investor (a) agrees to sell
such Investor's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Investors entitled hereunder to approve such
arrangements, (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements, and (c) agrees to pay its pro
rata share of all underwriting discounts and commissions.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other than
------------------------
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company, shall be borne by the Company.
6. INDEMNIFICATION. If any Registrable Securities are included in a
---------------
Registration Statement under this Agreement:
6.1 By the Company. To the extent permitted by law, the Company will
--------------
indemnify, hold harmless and defend each Investor, each director and officer of
and person, if any, who controls such Investor within the meaning of the 1933
Act or the 1934 Act, and each underwriter (as defined in the ▇▇▇▇ ▇▇▇) for the
Investors, and each director and officer of, and each person, if any, who
controls, such underwriter within the meaning of the 1933 Act or the 1934 Act
(each, an "Indemnified Person"), against any losses, claims, damages,
liabilities or expenses (joint or several) (collectively, "Claims") to which any
of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
on: (a) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, (b) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any
7
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (c) any violation or alleged violation caused by
the Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the preceding clauses (a), (b) and (c)
being, collectively, "Violations"). Subject to the restrictions in section 6.4
with respect to the number of legal counsel, the Company shall reimburse each
Indemnified Person promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by such
Indemnified Person in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary herein, the indemnification agreement
in this section 6.1: (1) shall not apply to a Claim arising out of or based on a
Violation that occurs in reliance on and in conformity with information
furnished in writing to the Company by, or caused by, any Indemnified Person or
underwriter for such Indemnified Person in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to section
3.3; (2) with respect to any preliminary prospectus, shall not inure to the
benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to section 3.3; (3) shall not be
available to the extent that such Claim is based on a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the
Company; and (4) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to section 9.
6.2 By the Investors. In connection with any Registration
----------------
Statement in which an Investor is participating, each such Investor agrees to
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in section 6.1, the Company, each of its directors, each of its
officers who signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act, any underwriter
and any other stockholder selling securities pursuant to the Registration
Statement or any of its directors or officers or any person who controls such
stockholder or underwriter within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise, insofar as such Claim arises out of or is based on
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance on and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement or to the extent such Claim is based on any
violation or alleged violation by the Investor of the 1933 Act, 1934 Act or any
other law; and such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such
8
Claim; provided that the indemnity agreement in this section 6.2 shall not apply
to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld; and provided further that the Investor shall be liable
under this section 6.2 for only such amount of a Claim as does not exceed the
net proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to section 9. Notwithstanding anything to the contrary
herein, the indemnification agreement in this section 6.2 with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.
6.3 By Others. The Company shall be entitled to receive indemnities
---------
from underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same extent as
provided above, with respect to information such persons so furnished in writing
expressly for inclusion in the Registration Statement.
6.4 Procedures. Promptly after receipt by an Indemnified Person or
----------
Indemnified Party under this section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay reasonable fees for only one separate legal
counsel for the Investors, and such legal counsel shall be selected by the
Investors holding a majority of the Registrable Securities included in the
Registration Statement to which the Claim relates. The failure to deliver
written notice to the indemnifying party within a reasonable time after the
threat or commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION. To the extent that any indemnification by an
------------
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the
9
maximum contribution with respect to any amounts for which it would otherwise be
liable under section 6 to the fullest extent permitted by law; provided that (a)
no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in section
6, (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation, and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT. With a view to making available to the
--------------------------
Investors the benefits of Rule 144 under the 1933 Act or any other similar rule
or regulation of the SEC that may at any time permit the investors to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
8.1 Information. Make and keep public information available, as
-----------
those terms are understood and defined in Rule 144;
8.2 Reports. File with the SEC in a timely manner all reports and
-------
other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements, and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and
8.3 Confirmation. Furnish to each Investor so long as such Investor
------------
owns Registrable Securities, promptly on request, (a) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (b) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (c) such other information as may be reasonably requested to permit
the investors to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to have the Company
---------------------------------
register Registrable Securities pursuant to this Agreement shall be
automatically assignable by the Investors to any transferee of twenty-five
percent or more of the Registrable Securities if: (a) the Investor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the 1933 Act and applicable state
securities laws, (d) at or before the time the Company receives the written
notice contemplated by clause (b) of this sentence the transferee or assignee
agrees in writing with the Company to become a party to and be bound by this
Agreement, (e) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement, (f) such
transferee shall be an "accredited investor" as that term defined in Rule 501 of
Regulation D under the 1933 Act, and (g) if the assignment occurs after the date
of effectiveness of the Registration Statement
10
required to be filed pursuant to section 2.1, the transferee agrees to pay all
reasonable expenses of amending or supplementing such Registration Statement to
reflect such assignment.
10. AMENDMENT OF REGISTRATION RIGHTS. This Agreement may be amended and
--------------------------------
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and Investors who hold a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this section 10
shall be binding on each Investor and the Company.
11. MISCELLANEOUS.
-------------
11.1 Holder. A person or entity is deemed to be a holder of
------
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act on the basis of instructions,
notices or elections received from the registered owner of such Registrable
Securities.
11.2 Notices. Any notices or other communications required or
-------
permitted to be given under this Agreement shall be sent by registered or
certified mail, return receipt requested, or delivered personally or by
facsimile or courier and shall be effective five days after being placed in the
mail, if mailed, or on receipt, if delivered personally or by courier or
facsimile, in each case properly addressed to the party to receive such notice.
The addresses for such communications shall be:
If to the Company:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Legal Department
With copy to:
Shartsis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Buyer, at the addresses on the signature page of this
Agreement.
Each party shall provide notice to the other party of any change
in address.
11
11.3 Governing Law. This Agreement shall be governed by and
-------------
construed and interpreted in accordance with the laws of the State of Delaware
without regard to the principles of conflict of laws.
11.4 Severability. If any provision of this Agreement shall be
------------
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
11.5 Entire Agreement. This Agreement and the Securities Purchase
----------------
Agreement together constitute the entire agreement of the parties and supersede
all prior or contemporaneous negotiations, correspondence, understandings and
agreements, written or oral, regarding the subject matter hereof.
11.6 Successors and Assigns. Subject to section 9, this Agreement
----------------------
hall inure to the benefit of and bind the parties hereto and their respective
permitted successors and assigns.
11.7 Headings; References. The headings in this Agreement are for
--------------------
convenience of reference only and are not part of this Agreement. References to
sections herein refer to sections of this Agreement, except as otherwise
indicated. The singular includes the plural and vice versa, as the context may
require.
11.8 Counterparts. This Agreement may be executed in two or more
------------
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. If any signature page is delivered by
facsimile transmission, the party using such means of delivery shall cause four
additional original executed signature pages to be physically delivered to the
other party within five days of the execution and delivery hereof.
11.9 Further Assurances. Each party shall do and perform, or cause
------------------
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.
12
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: BUYER:
--------
SYQUEST TECHNOLOGY, INC. SAE MAGNETICS (HK) LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇
---------------------- ------------------------
Name: Name: ▇▇▇▇ ▇▇▇▇
Its: Chairman Its: Vice President
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------
_____________________
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
-------------------
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-------------------
13