Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 28, 1999
(the "Agreement"), is made by and between Socket Communications, Inc., a
Delaware corporation (the "Company"), and the purchasers ( (the "Placement Agent")) named on the signature pages
hereto (individually, a "Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H :
WHEREAS, in connection with the Subscription Agreement dated
September 28, 1999 between the Purchasers and the Company (the
"Subscription Agreement"), the Company has agreed, upon the terms and
subject to the conditions of the Subscription Agreement to issue and
sell to the Purchasers up to twenty-four (24) Units, each Unit
consisting of 46,296 shares of the Company's Common Stock (the "Common
Shares") and a warrant (each, a "Warrant" and collectively the
"Warrants") to purchase additional shares of the Company's Common Stock
with the closing of such issuance and sale to occur on a date mutually
agreed upon by the Company and the Purchasers (the "Closing Date"). The
shares of Common Stock issuable upon exercise of the Warrants are
collectively referred to as the "Warrant Shares".
WHEREAS, to induce the Purchasers to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain
registration rights with respect to the Common Shares and the Warrant
Shares.
NOW, THEREFORE, in consideration of the promises 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 Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the
Subscription Agreement. As used in this Agreement, the following terms
shall have the following meanings:
(a) "SEC" shall mean the Securities and Exchange Commission
or any other Federal agency at the time administering the Securities
Act.
(b) "Common Stock" shall mean all shares of Common Stock of
the Company.
(c) "1933 Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to
time.
(d) "Holders" are stockholders of the Company who, by virtue
of agreements with the Company, are entitled to include their securities
in certain Registration Statements filed by the Company.
(e) "Investors" means the Purchasers and any transferees or
assignees of the Investors who agree to become bound by the provisions
of this Agreement in accordance with Section 8 hereof.
(f) "Registrable Securities" shall mean (i) the Common
Shares, (ii) the Warrant Shares, (iii) the shares of Common Stock
issuable upon exercise of warrants of even date herewith (the "Agent's
Warrants") issued to the Placement Agent and its selected dealers (the
"Agent's Shares") and (iv) any shares of Common Stock issued as a
dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i), (ii) or (iii) above.
(g) "Registration Period" means the period between the
effective date of a Registration Statement and the earlier of (i) the
date on which all of the Registrable Securities have been sold and no
further Registrable Securities may be issued in the future, or (ii) the
date on which all the Registrable Securities held by an Investor (in the
opinion of Company counsel) may be immediately sold without registration
and without restriction as to the number of Registrable Securities to be
sold pursuant to Rule 144 as promulgated under the 1933 Act ("Rule 144")
or otherwise.
(h) "Registration Statement" means, collectively, each
registration statement filed with the Securities and Exchange Commission
(the "SEC") under the 1933 Act pursuant to the terms hereof.
(i) The terms "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 as promulgated under the 1933 Act or any successor rule
providing for offering securities on a continuous basis ("Rule 415") and
applicable rules and regulations thereunder, and the declaration or
ordering of effectiveness of such Registration Statement by the SEC.
2. Registration.
(a) Mandatory Registration. Subject to the limitations of
this Section 2, the Company shall file within ninety (90) days of the
Closing Date a Registration Statement 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) with the SEC registering for resale Registrable
Securities and any other securities of the Company which are held by
Holders who are entitled to include securities in such registration. To
the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), the Registration Statement shall
include the Common Shares, the Warrant Shares, the Agent's Shares and
such indeterminate number of additional shares of Common Stock as may
become issuable upon exercise of the Warrants and the Agent's Warrants
to prevent dilution resulting from stock splits, stock dividends or
similar transactions. The number of shares of Registrable Securities
initially included in such Registration Statement shall be no less than
the number of Common Shares plus the number of Warrant Shares issued and
issuable upon exercise of the Warrants plus the number of Agent's Shares
issued and issuable upon exercise of the Agent's Warrants.
The Company shall use its reasonable best efforts to cause such
Registration Statement to be declared effective by the SEC within ninety
(90) days after filing. Once declared effective by the SEC, the Company
shall cause such Registration Statement to remain effective throughout
the Registration Period, except as otherwise permitted pursuant to
Sections 3(a) and 3(e).
(b) Eligibility for Form S-3. The Company represents and
warrants that it meets the requirements for the use of Form S-3 for
registration of the sale by the Investors of the Registrable Securities.
The Company shall use its best efforts to file all reports required to
be filed by the Company with the SEC in a timely manner so as to
preserve its eligibility for the use of Form S-3. In the event that Form
S-3 is not available for sale by the Investors of the Registrable
Securities, then the Company (i) with the consent of the Investors
holding a majority of the Registrable Securities pursuant to Section
2(a), shall register the sale of the Registrable Securities on another
appropriate form and (ii) the Company shall undertake to register the
Registrable Securities on Form S-3 as soon as such form is available,
provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.
3. Additional Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall have the
following additional obligations:
(a) The Company shall use its best efforts to keep the
Registration Statement effective pursuant to Rule 415 under the 1933 Act
at all times during the Registration Period until the earlier of (i) the
date as of which the Investors may sell all of the Registrable
Securities without restriction pursuant to Rule 144(k) promulgated under
the 1933 Act (or successor thereto) in the opinion of Company's counsel
or (ii) the date on which the Investors shall have sold all the
Registrable Securities. Notwithstanding the foregoing, the Investors
agree that use of the prospectus under the Registration Statement may be
suspended (i) during any period following a Suspension Event (as defined
in and as provided under the terms of Section 3(f)) (each such period of
suspension is referred to herein as a "Suspension Period" ) and
(ii) during any period following receipt by Investors of any notice from
the Company (a "Deferral Notice") that, in the judgment of the Company's
Board of Directors, it is advisable to suspend use of the prospectus for
a discrete period of time due to pending corporate developments, public
filing with the SEC or similar events (each such period of suspension is
referred to herein as a "Deferral Period"). Upon receipt of a Deferral
Notice, the Investors will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or
prospectus until advised in writing by the Company that use of the
applicable prospectus may be resumed, and until each such Investor has
received notice from the Company of the termination of the need for a
Deferral Period. Following the delivery of any Deferral Notice, Company
shall use all reasonable efforts to ensure that the use of the
prospectus may be resumed as soon as practicable.
(b) The Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) filed by the
Company 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. Except as otherwise provided
in Sections 3(a) and 3(f) herein, the Company shall 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 permit
sales pursuant to the Registration Statement at all times during the
Registration Period, and, during such period, shall 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 until the termination of the Registration Period, or if
earlier, 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) The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement and
its legal counsel (i) 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; and each
preliminary prospectus and final prospectus and each amendment or
supplement thereto; and (ii) 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) The Company shall use its reasonable best efforts to
(i) register and qualify the Registrable Securities covered by the
Registration Statement under such other securities or blue sky laws of
such jurisdictions as each Investor who holds (or has the right to hold)
Registrable Securities being offered reasonably request, (ii) prepare
and file in those jurisdictions such amendments (including post-
effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof
during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at
all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions. Notwithstanding the
foregoing provision, the Company shall not be required in connection
therewith or as a condition thereto to (i) qualify 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 material
expense or burden to the Company, or (v) make any change in its charter
or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders.
(e) The Company shall provide notices (by telephone and also
by facsimile or overnight courier) (a "Suspension Notice") to each
Investor who holds Registrable Securities being sold pursuant to a
Registration Statement of the happening of any event of which the
Company has knowledge as a result of which the prospectus included in
the Registration Statement 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 (a
"Suspension Event"). Subject to the Company's right to invoke a
Deferral Period pursuant to Section 3(a) and a Grace Period (as defined
herein), the Company shall make such notification as promptly as
practicable after the Company becomes aware of such Suspension Event,
shall promptly use its reasonable best efforts to prepare a supplement
or amendment to the Registration Statement to correct such untrue
statement or omission, and shall deliver a number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request. Notwithstanding anything to the contrary in this Section 3(e),
at any time after a Registration Statement has been declared effective,
the Company may delay amending or supplementing the Registration
Statement as otherwise required by this Section 3(e) and may otherwise
delay the disclosure of material non-public information concerning the
Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company and its counsel, in the
best interest of the Company and, in the opinion of counsel to the
Company, otherwise required (a "Grace Period"); provided, that the
Company shall promptly (i) notify the Investors in writing of the
existence of material non-public information giving rise to a Grace
Period and the date on which the Grace Period will begin (a "Blackout
Notice"), and (ii) notify the Investors in writing of the date on which
the Grace Period ends (a "Blackout Termination Notice"); and, provided
further, that (A) during any consecutive one hundred twenty (120) day
period, the Grace Period shall not exceed thirty (30) calendar days in
the aggregate, and (B) during any consecutive three hundred sixty five
(365) day period, the Grace Period shall not exceed forty-five (45)
calendar days in the aggregate. For purposes of determining the length
of a Grace Period above, the Grace Period shall begin on and include the
date the holders receive the Blackout Notice and shall end on and
include the date the holders receive the Blackout Termination Notice.
Upon expiration of the Grace Period, the Company shall again be bound by
the first sentence of this Section 3(e) with respect to the information
giving rise thereto. In the event that the use of the Registration
Statement is suspended by the Company, the Company shall promptly notify
all Investors whose securities are covered by the Registration Statement
of such suspension, and shall promptly notify each such Investor as soon
as the use of the Registration Statement may be resumed.
(f) Subject to the Company's rights under Sections 3(a) and
3(e), the Company shall use its reasonable 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, shall use its
reasonable efforts to obtain the withdrawal of such order at the
earliest possible time 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.
(g) The Company shall permit a single firm of counsel
designated by the Investors who hold a majority in interest of the
Registrable Securities being sold pursuant to such registration to
review the Registration Statement and all amendments and supplements
thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC.
The sections of such Registration Statement covering information with
respect to the Investors, the Investors' beneficial ownership of
securities of the Company or the Investors' intended method of
disposition of Registrable Securities shall conform to the information
provided to the Company by each of the Investors.
(h) At the request of the Investors who hold a majority in
interest of the Registrable Securities being sold pursuant to such
registration, the Company shall furnish on the date that Registrable
Securities are delivered to an underwriter for sale in connection with
the Registration Statement (i) a letter, dated such date, from the
Company's independent certified public accountants in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters; and (ii) an opinion, dated such date, from counsel
representing the Company for purposes of such Registration Statement, in
form and substance as is customarily given in an underwritten public
offering, addressed to the underwriters and Investors.
(i) The Company shall use reasonable efforts to cause the
listing and the continuation of listing of all the Registrable
Securities covered by the Registration Statement on the Pacific Stock
Exchange or any successor national exchange or market, and use
reasonable efforts to cause the Registrable Securities to be quoted or
listed on each additional national securities exchange or quotation
system upon which the Common Stock is then listed or quoted.
(j) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later
than the effective date of the Registration Statement.
(k) At the request of any Investor, the Company shall
promptly prepare and file with the SEC such amendments (including post-
effective amendments) and supplements to a Registration Statement and
the prospectus used in connection with the Registration Statement as may
be necessary in order to change the plan of distribution set forth in
such Registration Statement.
(l) The Company shall comply with all applicable laws related
to a Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in
connection therewith (including, without limitation, the 1933 Act and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations promulgated by the SEC).
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 complete the registration pursuant to this Agreement with
respect to the Registrable Securities of each 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 the Registrable
Securities. At least ten (10) business 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 (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
Registration Statement 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 the 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.
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Sections 3(a), 3(e) and 3(f), as may applicable, such Investor will
immediately discontinue disposition of Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities until
(i) the Investor has received the notice, if any, from the Company
required under Sections 3(a), 3(e) or 3(f), as may be applicable, and
(ii) such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Sections 3(a), 3(e) and 3(f), as may
applicable, 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 (other than a limited number of file copies), of
the prospectus covering such Registrable Securities current at the time
of receipt of such notice.
(d) Without limiting any Investor's rights under Section 2(a)
hereof, no Investor may participate in any underwritten distribution
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 underwriter 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.
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, the fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of the counsel designated by the Investors in accordance
with Section 3(g) hereof, shall be borne by the Company.
Notwithstanding the foregoing, the Investors participating in any
registrations, filings or qualifications pursuant to sections 2 and 3
shall be responsible for the fees and expenses of additional counsel
representing such Investors in connection therewith.
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 1933 Act or the Exchange Act, any underwriter
(as defined in the ▇▇▇▇ ▇▇▇) 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 1933 Act or the Exchange Act (each, an "Indemnified
Person"), against any losses, claims, damages, expenses or liabilities
(joint or several) (collectively together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether
commenced or threatened in respect thereof, "Claims") to which any of
them become subject under the 1933 Act, the Exchange Act or otherwise,
insofar as such Claims arise out of or are based upon any of the
following statements, omissions or violations in the 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 the 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 necessary to
make the statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the prospectus
(as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements
therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the Exchange Act or any other
law, including without limitation any state securities law or any rule
or regulation thereunder (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to the
restrictions set forth in Section 6(c) with respect to the number of
legal counsel, the Company shall reimburse the Investors and each such
underwriter or controlling person and each such other Indemnified
Person, promptly as such expenses are incurred and are due and payable,
for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (A) shall not
apply to a Claim arising out of or based upon a Violation which occurs
in reliance upon and in conformity with information furnished in writing
to the Company by any Indemnified Person 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; and (B) 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 Persons and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 8.
(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 1933 Act or the Exchange Act, 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 within the meaning of the 1933 Act or the Exchange Act
(an "Indemnified Party" and, collectively, "Indemnified Parties"),
against any Claim to which any of them may become subject, under the
1933 Act, the Exchange Act or otherwise, insofar as such Claim arises
out of or is based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration
Statement, and subject to Section 6(c), such Investor will promptly
reimburse any legal or other expenses (promptly as such expenses are
incurred and due and payable) reasonably incurred by all Indemnified
Parties in connection with investigating or defending any such Claim;
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 the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided
further, however, that the Investor shall be liable under this Agreement
(including this Section 6(b) and Section 7) for only that amount of a
Claim as does not exceed the net proceeds actually received by 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 8.
(c) 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 made
against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and this
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
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that such Indemnified Party shall diligently pursue
such defense and that such Indemnified Party shall not be entitled to
assume such defense and 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
conflicts of interest between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding
or the actual or potential defendants in, or targets of, any such action
including both the Indemnified Person or the Indemnified Party and any
such Indemnified Person or Indemnified Party reasonably determines that
there may be legal defenses available to such Indemnified Person or
Indemnified Party which are different from or in addition to those
available to such indemnifying party. The Company shall pay for only one
separate legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities. 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, as such expense,
loss, damage or liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification provided for
herein is prohibited or limited by law, the indemnifying party agrees to
make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that (i) no contribution shall be
made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6,
(ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇)
shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation, and
(iii) contribution (together with any indemnification or other
obligations under this Agreement) 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. Assignment of Registration Rights. The rights of the
Investors hereunder, including the right to have the Company register
Registrable Securities pursuant to this Agreement shall be automatically
assigned by the Investors to transferees or assignees of all or any
portion of such securities only if (i) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) 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, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws,
(iv) at or before the time the Company received the written notice
contemplated by clause (ii) of this sentence, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein, (v) such transfer shall have been made in accordance
with the applicable requirements of the Subscription Agreement
including, but not limited to, the covenant of each Investor that it
will not transfer any of the Securities in violation of satisfaction of
all requirements of Federal and State securities laws, and (vi) such
transferee shall be an "Accredited Investor" as that term is defined in
Rule 501 of Regulation D promulgated under the 1933 Act.
9. Amendment of Registration Rights. Provisions of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and
Investors who hold a majority interest of the Registrable Securities
(but not an Investor who no longer owns any Registrable Securities and
who is not affected by such amendment or waiver). Any amendment or
waiver effected in accordance with this Section 9 shall be binding upon
each Investor and the Company. Notwithstanding the foregoing, no
amendment or waiver shall retroactively affect any Investor without its
comment or prospectively adversely affect any Investor who no longer
owns any Registrable Securities without its consent.
10. Miscellaneous.
(a) Conflicting Instructions. 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. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or
registered mail (with return receipt requested) or delivered personally
or by courier (including a nationally recognized overnight delivery
service) or by facsimile transmission. Any notice so given shall be
deemed effective three days after being deposited in the U.S. Mail, or
upon receipt if delivered personally or by courier or facsimile
transmission, in each case addressed to a party at the following address
or such other address as each such party furnishes to the other in
accordance with this Section 10(b):
If to the Company:
Socket Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to an Investor: To the address set forth immediately below such
Investor's name on the signature pages hereto.
Each party shall provide written notice to the other parties of any
change in address.
(c) Waiver. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver thereof.
(d) Governing Law. This Agreement shall be enforced,
governed by and construed in accordance with the laws of the State of
Delaware applicable to the agreements made and to be performed entirely
within such state, without giving effect to rules governing the conflict
of laws, and any disputes arising hereunder will be adjudicated in
federal or state court situated in Delaware. Each party hereto consents
to such venue in Delaware and to the personal and subject matter
jurisdiction of said courts and, to the extent permitted by applicable
law, agrees to waive any objection as to such jurisdiction or venue, and
agrees not to assert any defense based on lack of jurisdiction or venue.
(e) Severability. 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
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.
(f) Successors and Assigns. Subject to the requirements of
Section 8 hereof, this Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto.
Notwithstanding anything to the contrary herein, including without
limitation, Section 8, the rights of an Investor hereunder shall be
assignable to and exercisable by a bona fide pledgee of the Registrable
Securities in connection with an Investor's margin or brokerage
accounts.
(g) Use of Pronouns. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
(h) Headings. The headings and subheadings in the Agreement
are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) Counterparts. 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
facsimile transmission, and facsimile signatures shall be binding on the
parties hereto.
(j) Further Acts. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments
and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and
the consummation of the transactions contemplated hereby.
(k) Consents. All consents and other determinations to be
made by the Investors pursuant to this Agreement shall be made by the
Investors holding a majority of the Registrable Securities, determined
as if all Warrants then outstanding had been exercised for Registrable
Securities.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.
COMPANY:
SOCKET COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President of Finance and Chief Financial Officer
INVESTORS:
By: -----------------------------------
Name:
Its:
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Address