EXHIBIT 8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 13, 1996
(this "Agreement"), is made by and between RADIUS INC., a
California corporation (the "Company"), and the person named on
the signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, in connection with each of the Subscription Agreements,
between certain unsecured creditors of the Company ("Creditors")
and the Company (the "Subscription Agreements"), the Company has
issued and sold to the Creditors shares (the "Shares") of Common
Stock, no par value (the "Common Stock") and certain Common Stock
Purchase Rights ("Rights") in satisfaction of certain claims of
such Creditors as set forth in the Subscription Agreements;
WHEREAS, the Company has issued to IBM Credit Corporation ("IBM
Credit") shares of Series A Convertible Preferred Stock (the
"Series A Preferred") and Warrants ("Warrants") to purchase
600,000 shares of Common Stock in satisfaction of certain
outstanding indebtedness of the Company to IBM Credit and
extension by IBM Credit of an advance of up to $500,000 as well
as the restructuring of the Company's remaining indebtedness to
IBM Credit (such transactions with IBM Credit are collectively
referred to herein as the "Restructuring");
WHEREAS, the Company has issued or will issue to certain
unsecured creditors ("Key Suppliers") Warrants to purchase an
aggregate of 600,000 shares of Common Stock;
WHEREAS, to induce (i) the Creditors to execute and deliver the
Subscription Agreements, (ii) IBM Credit to enter into the
Restructuring and, (iii) the Key Suppliers to accept Warrants to
ensure favorable credit and supply terms, 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 "Securities
Act"), and applicable state securities laws with respect to the
Registrable Securities (defined below);
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree
as follows:
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1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Demand Securities" means the Warrant Shares and the
Dividend Shares.
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(b) "Demand Registration" means a registration effected pursuant
to Section 2(b) hereof.
(c) "Dividend Shares" means any shares of Common Stock issuable
in lieu of cash dividends paid or to be paid on the Series A
Preferred.
(d) "Effectiveness Period" means with respect to (i) the Shelf
Registration, a period of 24 consecutive months from the
effective date of the Registration Statement relating to the
Initial Registration and (ii) any Demand Registration, a period
of 90 consecutive days from the effective date of the Demand
Registration and excluding any period of time in which the
Effectiveness Period may be suspended pursuant to the provisions
of clauses (i)-(iv) of Section 3(a).
(e) "Form S-3" means such form under the Securities Act as is in
effect on the date hereof or any successor registration form
under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the SEC.
(f) "Holdover Securities" means Registrable Securities which are
held by an Investor after the end of the Effectiveness Period for
the Shelf Registration and which Investor also holds Demand
Securities.
(g) "Initial Registration" means a registration effected
pursuant to Section 2(a) hereof.
(h) "Investor" means the Initial Investor and any transferee or
assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(i) "register," "registered" and "registration" refer to a
registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act
and, to the extent required hereunder, pursuant to Rule 415, and
the declaration or ordering of effectiveness of such Registration
Statement by the SEC.
(j) "Registrable Securities" means the Shares, the Warrant
Shares, the Dividend Shares, the Rights Shares, the Series A
Shares, the Series A Preferred and the Warrants.
(k) "Registration Statement" means a registration statement of
the Company under the Securities Act with respect to the Shelf
Registration or the Demand Registration, as the case may be.
(l) "Registration Termination Date" means the date on which the
Company's obligation to register or maintain any registration
with respect to any Registrable Securities terminates as provided
in Section 11 hereof.
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(m) "Rights Shares" means shares of Common Stock issued or
issuable pursuant to the Rights issued to the Creditors pursuant
to the Subscription Agreements.
(n) "Rule 144" means Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
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regulation hereafter adopted by the SEC.
(o) "Rule 415" means Rule 415 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
(p) "SEC" means the U.S. Securities and Exchange Commission.
(q) "Securities Act" means the Securities Act of 1933, as
amended.
(r) "Series A Shares" means shares of Common Stock issued or
issuable upon conversion of the Series A Preferred.
(s) "Shelf Registration" means the Initial Registration and any
Subsequent Registration.
(t) "Subsequent Registration" has the meaning specified in
Section 2 hereof.
(u) "Target Effective Date" means 60 days after the issuance of
the Shares.
(v) "Target Filing Date" means 10 days after the issuance of the
Shares.
(w) "Underwritten Offering" means an underwritten public
offering on a firm commitment basis.
(x) "Warrant Shares" means shares of Common Stock issued or
issuable upon exercise of the Warrants issued to IBM Credit and
the Key Suppliers.
2. Registration.
(a) Initial Registration.
(i) The Company shall prepare and file with the SEC a
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable
Securities. The Initial Registration shall be on Form S-1 or
another appropriate form permitting registration of such
Registrable Securities for resale by such holders in the manner
or manners designated by them (including, without limitation, one
or more underwritten offerings). Such filing shall be made on or
before the Target Filing Date. The Company shall use its best
efforts to have such Initial Registration declared effective on
or before the Target Effective Date and to keep the Initial
Registration continuously effective under the Securities Act
until the earlier to occur of the date that is 24 months from the
effectiveness date of the Initial Registration (the "Initial
Effectiveness Period") or the Registration Termination Date.
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(ii) If the Initial Registration or a Subsequent Registration
ceases to be effective for any reason at any time during the
Effectiveness Period (other than because of the occurrence of the
Registration Termination Date with respect to the Registrable
Securities covered thereby), the Company shall use its best
efforts to obtain the prompt withdrawal of any order suspending
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the effectiveness thereof, and in any event shall within 30 days
of such cessation of effectiveness file an amendment to the
Initial Registration in a manner reasonably expected to obtain
the withdrawal of the order suspending the effectiveness thereof,
or file an additional "shelf" Registration Statement pursuant to
Rule 415 covering all of the Registrable Securities (a
"Subsequent Registration"). If a Subsequent Registration is
filed, the Company shall use its best efforts to cause the
Subsequent Registration to be declared effective as soon as
practicable after such filing and to keep such Registration
Statement continuously effective until the earlier to occur of
the end of the Effectiveness Period or the Registration
Termination Date.
(iii) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or
instructions applicable to the registration form used by the
Company for such Shelf Registration, if required by the
Securities Act.
(b) Demand Registration.
(i) If the Company shall receive at any time after the end of
the Effectiveness Period for the
Shelf Registration, a written request from the Investors of at
least thirty-three percent (33%) of the Demand Securities then
outstanding that the Company file a registration statement under
the Securities Act covering the registration of the Demand
Securities pursuant to this Section 2(b), then the Company shall,
within ten (10) business days of the receipt of such written
request, give written notice of such request ("Request Notice")
to all Investors, and file within thirty (30) days and use its
best efforts to cause such Registration Statement to become
effective within an additional thirty (30) days, the Registration
Statement covering all Demand Securities which Investors request
to be registered and included in such registration by written
notice given such Investors to the Company within twenty (20)
days after receipt of the Request Notice; provided that the
Registrable Securities requested by all Investors to be
registered pursuant to such request must be at least thirty-three
percent (33%) of all Demand Securities then outstanding; provided
further, that in the event the proposed offering described in the
Request Notice is an Underwritten Offering, then additional
Holdover Securities (other than Warrants and Series A Preferred)
held by Investors may be included in the registration described
in the Request Notice, subject to compliance with subsection (ii)
below.
(ii) If the Investors initiating the registration request under
this Section 2(b) ("Initiating Investors") intend to distribute
the Demand Securities covered by their request by means of an
Underwritten Offering, then they shall so advise the Company as a
part of their request made pursuant to this Section 2(b) and the
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Company shall include such information in the Request Notice
referred to in subsection (i) of this Section 2(b). In such
event, the right of any Investor to include his Demand Securities
and, if applicable, Holdover Securities in such registration
shall be conditioned upon such Investor's participation in such
Underwritten Offering and the inclusion of such Investor's Demand
Securities in the Underwritten Offering (unless otherwise
mutually agreed by a majority in interest of the Initiating
Investors and such Investor) to the extent provided herein. All
Investors proposing to distribute their securities through such
Underwritten Offering shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriters
selected for such Underwritten Offering by the Company.
Notwithstanding any other provision of this Section 2(b), if the
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underwriter(s) advise(s) the Company in writing that marketing
factors require a limitation of the number of securities to be
underwritten then the Company shall so advise all Investors
owning Demand Securities and, if applicable, Holdover Securities,
which would otherwise be registered and underwritten pursuant
hereto, and the number of Demand Securities and, if applicable,
Holdover Securities, that may be included in the Underwritten
Offering shall be reduced as required by the underwriter(s) and
allocated among the Investors owning Demand Securities and, if
applicable, Holdover Securities, on a pro rata basis according to
the number of Demand Securities and, if applicable, Holdover
Securities, then outstanding held by each Investor requesting
registration (including the Initiating Investors).
(iii) Maximum Number of Demand Registrations. The Company is
obligated to effect only two (2) such registrations pursuant to
this Section 2(b) in any calendar year.
(iv) Deferral. Notwithstanding the foregoing, if the Company
shall furnish to Investors requesting a Demand Registration, a
certificate signed by the President or Chief Executive Officer of
the Company stating that in the good faith judgment of the Board
of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of
such registration statement, then the Company shall have the
right to defer such filing for a period of not more than one
hundred twenty (120) days after receipt of the request of the
Initiating Investors; provided, however, that the Company may not
utilize this right more than once in any twelve (12) month
period.
(v) Form S-3 Registration. In lieu of the Company's obligation
to effect Demand Registrations pursuant to this Section 2(b), the
Company may, at its election, at any time after the Effectiveness
Period of the Shelf Registration, prepare, file and cause to be
effective a Registration Statement on Form S-3, and subject to
the provisions of Section 3(a), keep such Registration Statement
effective pursuant to Rule 415 until the Registration Termination
Date. Upon the effectiveness of such Registration Statement on
Form S-3, the Investors shall no longer be permitted to effect a
Demand Registration.
3. Obligations of the Company. In connection with the
registration of the Registrable Securities pursuant to this
Agreement, the Company shall:
(a) prepare promptly and file with the SEC promptly (but in no
event later than as is set forth in Section 2 hereof) a
Registration Statement with respect to all Registrable Securities
to be included therein, and thereafter use its best efforts to
cause the Registration Statement to become effective as soon as
reasonably possible after such filing, and keep the Registration
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Statement effective pursuant to Rule 415 (except in the case of
an underwritten offering, for which Rule 415 will not be used) at
all times during the Effectiveness Period or until the
Registration Termination Date, whichever occurs first, which
Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading provided, however, that each Investor
shall have complied with its obligations under Section 4 with
respect to the Registrable Securities of such Investor to be
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included in the Registration Statement. Notwithstanding the
foregoing, in the event that (i) any request is made by the SEC
or any other federal or state governmental authority during the
Effectiveness Period for amendments or supplements to a
Registration Statement or related prospectus, (ii) any event
occurs that makes any statement made in such Registration
Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in
the Registration Statement or prospectus so that, in the case of
the Registration Statement, it will not contain any untrue
statement of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that
in the case of the prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, (iii) during the Effective Period for the
Shelf Registration, the Company becomes eligible to utilize From
S-3 (in which case, the Company shall be permitted to terminate
the effectiveness of the Initial Registration and file a
Registration Statement on Form S-3 and use its best efforts to
cause such Registration Statement to become effective within
thirty (30) days with respect to the Registrable Securities), or
(iv) in the judgment of the Company, it is advisable to suspend
use of the prospectus included in such Registration Statement for
a discrete period of time due to pending corporate developments
(including the pending automatic conversion of the Series A
Shares referred to in Section 7.2(a) of Article III of the
Company's Articles of Incorporation, as amended, in which case
such discrete period shall be one day), public filings with the
SEC or similar events, then the Company shall deliver a
certificate in writing to the Investors whose Registrable
Securities are included in the Registration Statement to the
effect of the foregoing and, upon receipt of such certificate,
the use of the Registration Statement and prospectus will be
deferred or suspended and will not recommence until such
Investor's receipt of copies of the supplemented or amended
prospectus, or until such Investors are advised in writing by the
Company that the prospectus may be used, and until such Investors
have received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in such
prospectus. The Company will use its best efforts to ensure that
the use of the Registration Statement and prospectus may be
resumed, as soon as practicable and, in the case of a pending
development, filing or event referred to in (iv) above, as soon,
in the judgment of the Company, as disclosure of the material
information relating to such pending development, filing or event
would not have a materially adverse effect on the Company's
ability to consummate the transaction, if any, to which such
development, filing or event relates. Notwithstanding the
foregoing or any other provision of this Agreement, the period
during which the Company shall be required to maintain the
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effectiveness of a Registration Statement with respect to a
Demand Registration shall be extended by 1 day for each full or
partial day during which the use of such Registration Statement
or prospectus is deferred or suspended by the Company in
accordance with this Section 2(b);
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Shelf
Registration or Demand Registration effective at all times until
the end of the Effectiveness Period or the Registration
Termination Date, whichever occurs first, and, during such
period, comply with the provisions of the Securities Act with
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respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statement until such time as
all of such Registrable Securities 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;
(c) furnish to each Investor whose Registrable Securities are
included in the Registration Statement, such number of copies of
a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents, as
such Investor may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Shelf Registration or
Demand Registration under such other securities or blue sky laws
of such jurisdictions as the Investors who hold a majority in
interest of the Registrable Securities or Demand Securities, as
applicable, being offered reasonably request, (ii) prepare and
file in those jurisdictions such amendments (including
post-effective amendments) and supplements, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times until the end of the
Effectiveness Period or the Registration Termination Date,
whichever occurs first, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable
Securities or Demand Securities, as applicable, for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (I)
quality to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (II)
subject itself to general taxation in any such jurisdiction,
(III) file a general consent to service of process in any such
jurisdiction, (IV) provide any undertakings that cause more than
nominal expense or burden to the Company or (V) make any change
in its charter or by-laws;
(e) as promptly as practicable after becoming aware of such
event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Shelf Registration or Demand
Registration, as then in effect, includes an untrue statement of
a material fact or omits 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 a number of copies
of such supplement or amendment to each Investor as such Investor
may reasonably request;
(f) as promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities
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being sold (or, in the event of an Underwritten Offering, the
managing underwriters) of the issuance by the SEC (or any state
agency) of any stop order or other suspension of effectiveness of
any Registration Statement (or state qualification) at the
earliest possible time;
(g) permit a single firm of counsel designated as selling
shareholders' counsel by the Investors to review a Registration
Statement and all amendments and supplements thereto a reasonable
period of time prior to their filing with the SEC, provided,
however, any such objection to the filing of any Registration
Statement or amendment thereto or any prospectus or supplement
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thereto shall be made by written notice (the "Objection Notice")
delivered to the Company no later than three (3) Business Days
after the party or parties asserting such objection receives
draft copies of the documents that the Company proposes to file.
The Objection Notice shall set forth the objections and the
specific areas in the draft documents where such objections
arise, and shall not file any document in a form to which such
counsel reasonably objects, provided that the Company shall be
permitted to take such actions that are required to comply with
applicable law;
(h) make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities
Act) covering a twelve-month period beginning not later than the
first day of the Company's fiscal quarter next following the
effective date of any Registration Statement and any post
effective amendment thereto;
(i) make available for inspection by any Investor, any
underwriter participating to any Underwritten Offering, and any
attorney, accountant or other agent retained by any such Investor
or underwriter (collectively, the "Inspectors"), all pertinent
documents of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable each Inspector to exercise its
due diligence responsibility, if and to the extent it has any
such responsibility under the Securities Act, and cause the
Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for
purposes of such due diligence; provided, however, that each
Inspector shall hold in confidence and shall not make any
disclosure (except to an Investor) of any Record or other
non-public information relating to the Company received by such
Inspector unless (i) the disclosure of such Records is necessary
to avoid or correct a misstatement or omission in any
Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction or (iii) 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; and provided further, however, that in the event
any Investor obtains material nonpublic information concerning
the Company pursuant to this Section 3(i) or Section 3(a) or 3(e)
or otherwise, such Investor shall not purchase or sell or
otherwise trade in any securities of the Company in violation of
applicable law until such information is made public by the
Company. 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, substantially in the form
of this Section 3(i). Each Investor agrees that it shall, upon
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learning that disclosure of such Records is sought in or by a
court or governmental body of competent jurisdiction, given
prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, the Records deemed
confidential;
(j) use its best efforts either to (i) cause all the Registrable
Securities covered by any Registration Statement to be listed on
a national securities exchange, if the listing of such
Registrable Securities is then permitted under the rules of such
exchange, or (ii) secure the quotation of the Registrable
Securities on the Nasdaq National Market if such quotation is
then permitted under the rules of the Nasdaq;
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(k) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the
effective date of any Registration Statement;
(l) cooperate with the Investors who hold Registrable Securities
being sold and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing Registrable
Securities to be sold pursuant to the Shelf Registration or
Demand Registration, as the case may be, and enable such
certificates to be in such denominations or amounts as the case
may be, and registered in such names as the managing underwriter
or underwriters, if any, or the Investors may reasonable request;
and
(m) take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with the
registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement with
respect to any 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 the effect the registration of the Registrable
Securities and shall execute such documents in connection with
such registration as the Company may reasonably request. At
least fifteen (15) days prior to the first anticipated filing
date of the Shelf Registration or the Demand Registration, as the
case may be, the Company shall notify each Investor of the
information the Company requires from each such Investor (the
"Requested Information") if such Investor elects to have any of
such Investor's Registrable Securities included in the
Registration Statement. If within five (5) business days prior
to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then
the Company may file the Shelf Registration or the Demand
Registration, as the case may be, without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement;
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(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of any kind described
in Section 3(e) or 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until
such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) 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;
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(d) No Investor may participate in any Underwritten Offering
hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting
arrangements approved by the Investors entitled hereunder to
approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the
terms of such underwriting arrangements and (iii) agrees to pay
its pro rata share of all underwriting discounts and commissions
and other fees and expenses of investment bankers and any manager
or managers of such underwriting and legal expenses of the
underwriters applicable with respect to its Registrable
Securities, in each case to the extent not payable by the Company
pursuant to the terms of this Agreement;
(e) No Investor shall include the Investor's Registrable
Securities in any Registration Statement relating to a Demand
Registration unless the Investor has at such time a current
intent to sell such Registrable Securities, and by including such
Registrable Securities in such Registration Statement, the
Investor will be deemed to represent to the Company that the
Investor has such intent. Any sale of any Registrable Securities
by any Investor under any Registration Statement will constitute
a representation and warranty by such Investor that the
information relating to such Investor and its plan of
distribution is as set forth in the prospectus prepared by the
Company and furnished to such Investor for use in connection with
such disposition, and such prospectus does not as of the time of
such sale contain any untrue statement of a material fact
relating to such Investor or its plan of distribution and that
such prospectus does not as of the time of such sale omit to
state any material fact relating to such Investor or its plan of
distribution necessary to make the statements in such Prospectus,
in light of the circumstances under which they were made, not
misleading;
(f) Each Investor agrees that, in disposing of any Registrable
Securities pursuant to any Registration Statement, the Investor
will cause the disposition to be made in accordance with the
terms of the Registration Statement, including the plan of
distribution described therein, and will comply with all
applicable securities laws, including Rules 10b-2, 10b-5, 10b-6
and 10b-7 promulgated under the Exchange Act. Each Investor
agrees that in selling any Registrable Securities under any
Registration Statement, the Investor will deliver the current
prospectus contained in the Registration Statement, as amended
and supplemented, to all persons as required by the Securities
Act and the regulations thereunder and will comply with any
applicable "blue sky" laws and regulations in connection with the
disposition of such shares.
(g) Each Investor hereby agrees that it shall not, to the extent
requested by an underwriter of securities of the Company, sell or
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otherwise transfer or dispose of any Registrable Securities or
other securities of the Company then owned by such Investor
(other than to donees or affiliates of the Investor who agree to
be similarly bound) for up to one hundred eighty (180) days
following the effective date of a registration statement of the
Company filed under the Securities Act; provided, however, that
all executive officers and directors of the Company then holding
Common Stock of the Company enter into similar agreements. In
order to enforce the foregoing covenant, the Company shall have
the right to place restrictive legends on the certificates
representing the shares subject to this Section and to impose
stop transfer instructions with respect to the Registrable
Securities and such other shares of stock of each Investor (and
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the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
5. Expenses of Registration. All expenses, other than
underwriting discounts and commissions and brokerage commissions
and other fees and expenses of investment bankers, 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 the fees and disbursements of counsel for the
Company and counsel for the Investors as provided in Section
3(g), shall be borne by the Company; provided, however, that the
Investors shall bear the fees and out-of-pocket expenses of their
legal counsel, if any, selected by the Investors pursuant to
Subsection (ii) of Section 2(b) hereof in the case of an
Underwritten Offering. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to this Section 2(b) if
the registration request is subsequently withdrawn at the request
of the Investors of a majority of the Demand Securities to be
registered, unless the Investors of a majority of the Demand
Securities then outstanding agree to forfeit their right to one
(1) demand registration pursuant to this Section 2(b) (in which
case such right shall be forfeited by all Investors holding
Demand Securities).
6. Indemnification. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the
officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act, and, in the case of a Demand Registration, if
the Registration Statement is for an underwritten offering, any
underwriter (as defined in the Securities Act) for the Investors,
the directors, if any, of such underwriter and the officers, if
any, of such underwriter, and each person, if any, who controls
any such underwriter within the meaning of the Securities Act or
the Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, expenses or liabilities (joint or
several) (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon any of the following statements, omissions or
violations in any Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in
the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of
the circumstances under which the statements therein were made,
not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, any state securities law or any
rule or regulation by the Company of the Securities Act, the
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Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section
6(d) with respect to the number of legal counsel, the Company
shall reimburse the Indemnified Persons, promptly as such expense
are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (I) shall not apply to
a Claim arising out of or based upon (A) a Violation which occurs
in reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Person or underwriter
for such Indemnified Person (to the extent such information was
provided by or on behalf of such Indemnified Person)expressly for
use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant
to Section 3(c) hereof or (B) any violation by an Investor of the
Investor's obligations under this Agreement; (II) 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(c) hereof; and
(III) 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,
provided, however, that if such claim is settled without the
consent of the Company and such claim is subsequently reduced to
a final, non appealable judgment or settlement which is adverse
to the Company, then the provisions of this clause III shall be
of no effect. 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.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify
and hold harmless, to the same extent and in the same manner set
forth in Section 6(a), 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 Securities Act or the Exchange Act, any other shareholder
and, in the case of a Demand Registration, any underwriter
selling securities pursuant to the Registration Statement or any
of its directors or officers or any person who controls such
shareholder or underwriter within the meaning of the Securities
Act or the Exchange Act (collectively and together with an
Indemnified Person, an "Indemnified Party"), against any Claim to
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which any of them may become subject, under the Securities Act,
the Exchange Act or otherwise, insofar as such Claim arises out
of or is based upon (i) any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with
such Registration Statement; and such Investor will reimburse any
legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim or (ii) any
violation by any Investor of such Investor's obligations under
this Agreement; provided, however, that the indemnity agreement
contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without
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the prior written consent of such Investor, 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 such Indemnified Party and shall survive the
transfer of the Registrable Securities by the Investors pursuant
to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section
6(b) with respect to any 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.
(c) The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in any
distribution, to the same extent as provided above, with respect
to information such persons so furnished in writing by such
persons expressly for inclusion in the Registration Statement.
(d) 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 parties; provided, however, that an Indemnified
Person or Indemnified Party shall have the right to retain its
own counsel, with the reasonable 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 conflicts of interests between such Indemnified Person
or Indemnified Party and any other party represented by such
counsel in such proceeding. The Company shall pay for only one
separate legal counsel for the Indemnified Persons; such legal
counsel shall be selected by the Investors holding a majority in
interest of the Registrable Securities and shall be approved by
the Company, such approval not to be unreasonably withheld. The
failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action
shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is 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,
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as such expense, loss, damage or liability is incurred and is due
and payable.
7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided,
however, that (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
Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation and (c) contribution by any seller of
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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 Exchange Act. With a view to making available
to the Investors the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC
that may at any time permit the Investors to sell securities of
the Company to the public without registration ("Rule 144"), the
Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and
the Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights to have
the Company register Registrable Securities other than Rights
Shares pursuant to this Agreement shall be automatically assigned
by the Investors to transferees or assignees of all of any
portion of such securities only 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 (i) the name and address of such
transferee or assignee and (ii) 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 Securities Act and applicable state
securities laws, and (d) at or before the time the Company
received the written notice contemplated by clause (b) of this
sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein and
(e) the transfer or assignment is made in compliance with the
transfer restrictions in any Subscription Agreement, Rights
Agreement, Warrant Agreement, or Series A Preferred Purchase
Agreement, as applicable.
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10. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and Investors who hold a majority in interest of the
Registrable Securities with each share of Series A Preferred and
each Series A Share being treated as one security and each
Warrant and each Warrant Share being treated as one security.
Any amendment or waiver effected in accordance with this Section
10 shall be binding upon each Investor and the Company.
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11. Term. The term of this Agreement and the obligations of the
parties hereunder (other than their obligations under Sections 5,
6 and 7, which will continue) will end (the "Registration
Termination Date") (i) with respect to Registrable Securities
other than Demand Shares or Holdover Securities, on the earlier
to occur of (A) the sale of the Registrable Securities, or (B) at
the end of the Effectiveness Period for the Shelf Registration,
and (ii) with respect to the Demand Shares and Holdover
Securities, on the earlier to occur of (A) the sale of the Demand
Securities and Holdover Securities, or (B) 24 months from the
date of issuance of such securities. In no event will the
Company be required to register hereunder or maintain any
registration hereunder of any Registrable Securities that are
then eligible for resale under Rule 144.
12. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or
entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be
in writing and shall be deemed to be sufficiently given when
personally delivered (by hand, by courier or overnight delivery
service, by telephone, facsimile transmission or other means) or
sent by certified mail, return receipt requested, properly
addressed and with proper postage prepaid (i) if to the Company,
at Radius Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: President, (ii) if to the Initial Investor, at
the address set forth under its name in the Subscription
Agreement and (iii) if to any other Investor, at such address as
such Investor shall have provided in writing to the Company, or
at such other address as each such party furnishes by notice
given in accordance with this Section 12(b), and shall be
effective, when personally delivered, upon receipt and, when so
sent by certified mail, four days after deposit with the United
States Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a wavier thereof.
(d) This Agreement shall be enforced, governed by and construed
in accordance with the laws of the State of California applicable
to agreements made and to be performed entirely within such
State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the
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extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any
other provision hereof.
(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There
are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
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(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context
may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the
meaning hereof.
(i) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto
by telephone line facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
RADIUS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and CEO
INITIAL INVESTOR:
Name: IBM Credit Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director Remarketer Financing Portfolio Controls
Permanent Address:
IBM Credit Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Taxpayer Identification Number
(required by transfer agent): ▇▇-▇▇▇▇▇▇▇