EXHIBIT 4.4
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ELECTROGLAS, INC.,
as the Company
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.,
as ▇▇▇▇▇▇▇▇▇
and
BUYERS,
as defined herein
REGISTRATION RIGHTS AGREEMENT
Dated as of June 19, 2002
5.25% Convertible Subordinated Notes due 2007
and Warrants to Purchase Common Stock
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TABLE OF CONTENTS
PAGE
SECTION 1. Definitions.............................................................. 1
SECTION 2. Registration............................................................. 2
SECTION 3. Related Obligations...................................................... 5
SECTION 4. Obligations Of The Investors............................................. 10
SECTION 5. Expenses Of Registration................................................. 11
SECTION 6. Indemnification.......................................................... 11
SECTION 7. Contribution............................................................. 14
SECTION 8. Reporting................................................................ 14
SECTION 9. Assignment of Registration Rights........................................ 14
SECTION 10. Amendment of Registration Rights......................................... 15
SECTION 11. Miscellaneous............................................................ 15
EXHIBIT A Schedule of Buyers....................................................... A-1
EXHIBIT B Form of Notice of Effectiveness of Registration Statement................ B-1
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is entered
into as of June 19, 2002, by and among Electroglas, Inc., a Delaware corporation
(the "Company"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. ("▇▇▇▇▇▇▇▇▇") and the buyers listed on
the Schedule of Buyers attached hereto as Exhibit A (each, a "Buyer" and,
collectively, the "Buyers").
THE PARTIES TO THIS AGREEMENT enter into this agreement on the basis
of the following facts, intentions and understanding:
A. The Company and the Buyers entered into that certain Securities
Purchase Agreement of even date herewith (the "Securities Purchase Agreement"),
and, upon the terms and subject to the conditions of the Securities Purchase
Agreement, the Company has agreed (i) to issue and sell to the Buyers an
aggregate of up to (A) Thirty-Five Million Five Hundred Thousand United States
Dollars ($35,500,000) of the Company's 5.25% Convertible Subordinated Notes due
2007 (such Convertible Subordinated Notes, as the same may be amended, modified
or supplemented from time to time in accordance with the terms thereof (the
"Notes")), which shall be convertible into shares of common stock, $0.01 par
value per share (the "Common Stock") of the Company (as converted, the
"Conversion Shares"), and (B) Warrants (such Warrants, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "Buyer Warrants") to purchase up to 649,612 shares of Common Stock
(as exercised collectively, the "Buyer Warrant Shares"), and (ii) to issue to
▇▇▇▇▇▇▇▇▇ Warrants (such Warrants, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"▇▇▇▇▇▇▇▇▇ Warrants" and, together with the Buyer Warrants, the "Warrants") to
purchase the number of shares of Common Stock set forth on the Schedule of Fees
attached as Exhibit D to the Securities Purchase Agreement (as exercised
collectively, the "▇▇▇▇▇▇▇▇▇ Warrant Shares" and, together with the Buyer
Warrant Shares, the "Warrant Shares").
B. To induce the Buyers to execute and deliver the Securities
Purchase Agreement and to induce ▇▇▇▇▇▇▇▇▇ to act as the Company's exclusive
placement agent, the Company has agreed to provide certain registration rights
to the Buyers and ▇▇▇▇▇▇▇▇▇ 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.
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 each of the Buyers hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Business Day" means any day other than Saturday, Sunday or any
other day on which commercial banks in The City of New York are required by law
to remain closed.
(b) "Investor" means ▇▇▇▇▇▇▇▇▇ and each Buyer and any transferee or
assignee thereof to whom ▇▇▇▇▇▇▇▇▇ or a Buyer assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 of this Agreement, and any subsequent transferee or
assignee thereof to whom a transferee or assignee assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 of this Agreement.
(c) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization or association and governmental or any department or agency
thereof.
(d) "register," "registered," and "registration" means a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the Securities Act and pursuant
to Rule 415 under the Securities Act or any successor rule providing for
offering securities on a continuous or delayed basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statements by the
United States Securities and Exchange Commission (the "Commission").
(e) "Registrable Securities" means (i) the Notes, (ii) the Warrants,
(iii) the Conversion Shares issued or issuable upon conversion of the Notes,
(iv) the Warrant Shares issued or issuable upon exercise of the Warrants, (v)
any shares of capital stock issued or issuable with respect to the Conversion
Shares, the Notes, the Warrant Shares or the Warrants as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on conversions of the Notes or the exercise of
the Warrants, and (vi) any shares of capital stock of any entity issued in
respect of the capital stock referenced in the immediately preceding clauses
(i), (ii), (iii), (iv) and (v) as a result of a merger, consolidation, sale of
assets, sale or exchange of capital stock or other similar transaction.
(f) "Registration Statement" means a registration statement or
registration statements of the Company filed under the Securities Act and
covering all of the Registrable Securities.
(g) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
SECTION 2. REGISTRATION.
(a) Mandatory Registration. The Company shall use its reasonable
efforts to prepare and, as soon as practicable but in no event later than 30
calendar days after the Closing Date (as that term is defined in the Securities
Purchase Agreement) (the "Filing Deadline"), file with the Commission a
Registration Statement on Form S-3 covering the resale of all of the Registrable
Securities. In the event that Form S-3 is unavailable for such a registration,
the Company shall use such other form as is available for such a registration,
subject to the provisions of Section 2(d) of this Agreement. The Registration
Statement prepared pursuant hereto shall register the Registrable Securities for
resale, including at least 105% of the number of shares of Common Stock issuable
upon conversion of the Notes and exercise of the Warrants by the Investors from
time to time in accordance with the methods of distribution elected by such
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Investors. The Company shall use reasonable efforts to have the Registration
Statement declared effective by the Commission as soon as practicable, but not
later than 90 calendar days after the Closing Date (the "Effectiveness
Deadline"); provided, however, that if the Commission reviews the Registration
Statement and requires the Company to make modifications thereto, then the
Effectiveness Deadline shall be extended to 120 calendar days after the Closing
Date. In the event that, after the Closing Date and before the Registration
Statement is declared effective, the offices of the Commission are closed due to
acts of God, war or terror, the Effectiveness Deadline will be extended by a
number of days equal to the days of any such closure.
(b) Allocation of Registrable Securities. The initial number of
Conversion Shares and Warrant Shares included in any Registration Statement and
each increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the Commission. In the event that an Investor sells or otherwise
transfers any of such Investor's Registrable Securities, each transferee shall
be allocated the portion of the then remaining number of Conversion Shares and
Warrant Shares included in such Registration Statement allocable to the
transferor. In no event shall the Company include any securities other than
Registrable Securities on any Registration Statement without the prior written
consent of the Investors holding at least a majority of the Conversion Shares
and Warrant Shares, determined as if all of the Notes held by Investors then
outstanding have been converted into Conversion Shares and all Warrants then
outstanding have been exercised for Warrant Shares without regard to any
limitations on conversion of the Notes or on the exercise of the Warrants.
(c) Legal Counsel. Subject to Section 5 of this Agreement, the
Investors holding at least a majority of the Conversion Shares and Warrant
Shares, determined as if all of the Notes held by Investors then outstanding
have been converted into Conversion Shares and all Warrants then outstanding
have been exercised for Warrant Shares without regard to any limitations on
conversion of the Notes or on the exercise of the Warrants, shall have the right
to select one legal counsel to review and comment upon any registration pursuant
to this Agreement (the "Legal Counsel"), which the Investors agree shall be
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or such other counsel as thereafter designated in
writing by the holders of at least a majority of the Conversion Shares and
Warrant Shares, determined as set forth above. The Investors hereby waive any
conflict of interest or potential conflict of interest that may arise as a
result of the representation of such Investors by ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in
connection with the subject matter of this Agreement. The provision will not
prohibit any other counsel to an Investor from reviewing and commenting on any
registration filed pursuant to this Agreement at no cost to the Company.
(d) Ineligibility for Form S-3. If Form S-3 is not available for the
registration of the resale of the Registrable Securities hereunder or the
Company is not permitted by the Securities Act or the Commission to use Form
S-3, then the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the holders of
at least a majority of the Conversion Shares and Warrant Shares, determined as
if all of the Notes held by Investors then outstanding have been converted into
Conversion Shares and all Warrants then outstanding have been exercised for
Warrant Shares without regard to any limitations on conversion of the Notes or
on the exercise of the Warrants and (ii) undertake to register the Registrable
Securities on Form S-3 as soon as such form is available; provided, however,
that the
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Company shall maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering all of
the Registrable Securities has been declared effective by the Commission.
(e) Sufficient Number of Shares Registered. In the event the number
of shares registered under a Registration Statement filed pursuant to Section
2(a) of this Agreement is insufficient to cover all of the Conversion Shares and
Warrant Shares or all of an Investor's allocated portion of the Conversion
Shares and Warrant Shares pursuant to Section 2(b) of this Agreement, the
Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover at least one hundred five percent (105%) of the number of such
Conversion Shares and Warrant Shares as of the trading day immediately preceding
the date of the filing of such amendment and/or new Registration Statement, in
each case, as soon as practicable, but in no event later than fifteen (15) days
after the necessity therefor arises. The Company shall use its reasonable
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. The calculation
of the number of shares sufficient to cover all of the Conversion Shares and
Warrant Shares shall be made without regard to any limitations on the conversion
of the Notes or the exercise of the Warrants, and such calculation shall assume
that all of the Notes are then convertible into, and all of the Warrants are
then exercisable for, shares of Common Stock at the then prevailing Conversion
Rate (as defined in the Notes) or Warrant Exercise Price (as defined in the
Warrants), as applicable.
(f) Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement. If (i) a Registration Statement covering all the
Registrable Securities is not filed with the Commission on or before the Filing
Deadline or is not declared effective by the Commission on or before the
Effectiveness Deadline, (ii) a Registration Statement covering all of the
Registrable Securities required to be covered thereby, as described in Section
2(e) of this Agreement, is not filed with the Commission on or before the
deadline described in Section 2(e) of this Agreement or is not declared
effective by the Commission on or before the deadline described in Section 2(e)
of this Agreement, (iii) on any day after such Registration Statement has been
declared effective by the Commission, sales of all of the Registrable Securities
required to be included on such Registration Statement cannot be made (other
than during an Allowable Grace Period (as defined in Section 3(n) of this
Agreement) pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement or to register a sufficient number of shares of
Common Stock), or (iv) a Grace Period (as defined in Section 3(n) of this
Agreement) exceeds the length of an Allowable Grace Period (each of the items
described in clauses (i), (ii) and (iii) above shall be referred to as a
"Registration Delay"), then the Company shall pay (1) to each holder of the
Notes or Conversion Shares an amount in cash equal to the product of (i) the
initial principal amount paid for such Note or the related Conversion Shares
multiplied by (ii) the product of (I) the percentage determined by dividing (A)
the Applicable Percentage by (B) 30, multiplied by (II) the sum of (x) the
number of days (including any partial days) after the Filing Deadline or the
deadline described in Section 2(e) of this Agreement, as applicable, that the
Registration Statement is not filed with the Commission, plus (y) the number of
days (including any partial days) after the Effectiveness Deadline or the
deadline described in Section 2(e) of this Agreement that the Registration
Statement is not declared effective by the Commission, plus (z) after the
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Registration Statement has been declared effective by the Commission, the number
of days (including any partial days) that such Registration Statement is not
available (other than during an Allowable Grace Period) for the sale of all the
Registrable Securities and (2) to each holder of the Warrants or Warrant Shares
an amount in cash equal to the product of (i) the Exercise Price for such
Warrant or the related Warrant Shares multiplied by (ii) the product of (I) the
percentage determined by dividing (A) the Applicable Percentage by (B) 30,
multiplied by (II) the sum of (x) the number of days (including any partial
days) after the Filing Deadline or the deadline described in Section 2(e) of
this Agreement, as applicable, that the Registration Statement is not filed with
the Commission, plus (y) the number of days (including any partial days) after
the Effectiveness Deadline or the deadline described in Section 2(e) of this
Agreement, as applicable, that the Registration Statement is not declared
effective by the Commission, plus (z) after the Registration Statement has been
declared effective by the Commission, the number of days (including any partial
days) that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of all Registrable Securities. The
"Applicable Percentage" shall mean (A) for period that only include days on or
before the day that is 60 days after the commencement of a Registration Delay,
eight-tenths percent (0.8%), (B) for periods that only include days after the
date that is 60 days after the commencement of a Registration Delay, one percent
(1.0%) and (C) for periods that include days both before and after the date that
is 60 days after the commencement of a Registration Delay, a percentage equal to
a fraction, the numerator of which shall be the sum of (i) the number of days in
such period that are on or before the date that is 60 days after the
commencement of such Registration Delay multiplied by eight-tenths percent
(0.8%) and (ii) the number of days in such period that are after the date that
is 60 days after the commencement of such Registration Delay multiplied by one
percent (1.0%) and the denominator of which shall be the total number of days
comprising such period. The payments to which a holder shall be entitled
pursuant to this Section 2(f) are referred to herein as "Registration Delay
Payments." The Registration Delay Payments shall be paid in cash on the earlier
of (A) the last day of the calendar month during which such Registration Delay
Payments are incurred and (B) the third Business Day after the event or failure
giving rise to the Registration Delay Payments is cured. In the event the
Company fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of one and
two-tenths percent (1.2%) per month (prorated for partial months) until paid in
full.
SECTION 3. RELATED OBLIGATIONS. At such time as the Company is
obligated to file a Registration Statement with the Commission pursuant to
Section 2(a), 2(d) or 2(e) of this Agreement, the Company will use reasonable
efforts to effect the registration of all of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:
(a) The Company shall promptly prepare and file with the Commission
a Registration Statement with respect to all of the Registrable Securities (but
in no event later than the applicable Filing Deadline) and use reasonable
efforts to cause such Registration Statement relating to all of the Registrable
Securities required to be covered thereby to become effective as soon as
practicable after such filing (but in no event later than the applicable
Effectiveness Deadline). The Company shall, subject to the terms of this
Agreement, keep each Registration Statement effective pursuant to Rule 415 at
all times until the earliest of (i) the second anniversary of the date such
Registration Statement is filed, (ii) the date as of which all of the
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Investors (other than any Investors who are "affiliates" of the Company as such
term is used in Rule 144(k) promulgated under the Securities Act) may sell all
of the Registrable Securities without restriction pursuant to Rule 144(k) (or
the successor rule thereto) promulgated under the Securities Act or (iii) the
date on which all of the Investors shall have sold all of the Registrable
Securities (the "Registration Period"), which Registration Statement, as of its
filing and effective dates and each day thereafter (including all amendments or
supplements thereto, as of their respective filing and effective dates and each
day thereafter), 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, not misleading, and the prospectus contained in
such Registration Statement, as of its filing date and each day thereafter
(including all amendments and supplements thereto, as of their respective filing
dates and each day thereafter), shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated thereon, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.
(b) Subject to Section 3(n) of this Agreement, the Company shall
prepare and file with the Commission such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with such Registration Statement, which prospectus is to be
filed pursuant to Rule 424 (or any successor rule thereto) promulgated under the
Securities Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act. In the case of amendments and
supplements to a Registration Statement and the prospectus used in connection
with such Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the Company
filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, or any similar successor statute (the "Exchange Act"),
the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or
supplements with the Commission on the same day on which the Exchange Act report
is filed which created the requirement for the Company to amend or supplement
such Registration Statement and prospectus.
(c) The Company shall permit Legal Counsel to review and comment
upon each Registration Statement, prospectus and all amendments and supplements
thereto at least one (1) Business Day prior to their filing with the Commission.
The Company shall furnish to the Investors and Legal Counsel, without charge,
(i) promptly after receipt of such correspondence, copies of all correspondence
from the Commission or the staff of the Commission to the Company or its
representatives relating to each Registration Statement, prospectus and all
amendments and supplements thereto, (ii) promptly after the same is prepared and
filed with the Commission, one (1) copy of each Registration Statement,
prospectus and all amendments and supplements thereto, including all exhibits
and financial statements related thereto, and (iii) promptly upon the
effectiveness of each Registration Statement and each amendment and supplement
thereto, one (1) copy of the prospectus included in each such Registration
Statement and all amendments and supplements thereto. The Company agrees that it
will, and it will cause its counsel to, consider in good faith any comments or
objections from Legal Counsel as to the form or content of each Registration
Statement, prospectus and all amendments or supplements
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thereto or any request for acceleration of the effectiveness of each
Registration Statement, prospectus and all amendments or supplements thereto.
(d) The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge to such
Investor, (i) promptly after the same is prepared and filed with the Commission,
at least one copy of such Registration Statement and all amendments and
supplements thereto, including all exhibits and financial statements and each
preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, such number of copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto as such Investor may
reasonably request, and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities.
(e) Subject to Section 3(n) of this Agreement, the Company shall use
reasonable efforts to (i) promptly register and qualify, unless an exemption
from registration and qualification applies, the resale of the Registrable
Securities under such other securities or "blue sky" laws of all applicable
jurisdictions in the United States as any holder of Registrable Shares
reasonably requests in writing, (ii) promptly 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)
promptly take such other actions as may be reasonably necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) promptly take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to file a general consent to service of
process in any such jurisdiction, except in such jurisdictions where the Company
is subject to service of process. The Company shall promptly notify each
Investor who holds Registrable Securities and Legal Counsel of the receipt by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of notice of the initiation or threatening of any proceeding for
such purpose.
(f) Notwithstanding anything to the contrary set forth herein, as
promptly as practicable after becoming aware of such event, the Company shall
notify each Investor and Legal Counsel in writing of the happening of any event
as a result of which (i) the Registration Statement or any amendment or
supplement thereto, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or (ii) the
prospectus related to such Registration Statement or any amendment or supplement
thereto includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and, subject to Section 3(n) of this Agreement, promptly prepare a
supplement or amendment to such Registration Statement and prospectus to correct
such untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Investor and Legal Counsel as such Investor or
Legal Counsel may reasonably request. The Company shall also promptly notify
each Investor and Legal Counsel in writing (i) when a prospectus and
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each prospectus supplement or amendment thereto has been filed, and when a
Registration Statement and each amendment (including post-effective amendments)
and supplement thereto has been declared effective by the Commission
(notification of such effectiveness shall be delivered to each Investor and
Legal Counsel by facsimile on the same day of such effectiveness and by
overnight mail), (ii) of any request by the Commission for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company's reasonable determination that an
amendment (including any post-effective amendment) or supplement to a
Registration Statement or prospectus would be appropriate (subject to Section
3(n) hereof).
(g) Subject to Section 3(n) of this Agreement, the Company shall use
reasonable efforts to (i) prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale in any
jurisdiction, (ii) if such an order or suspension is issued, obtain the
withdrawal of such order or suspension at the earliest practicable moment and
notify each holder of Registrable Securities and Legal Counsel of the issuance
of such order and the resolution thereof or its receipt of notice of the
initiation or threat of any proceeding for such purpose.
(h) The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with United States federal
or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement,
prospectus or any amendment or supplement thereto, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, unless ordered or requested by
the Commission or other governmental authority not to do so, give prompt written
notice to such Investor and allow such Investor, at the Investor's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(i) The Company shall use reasonable efforts to (i) cause all the
Conversion Shares and Warrant Shares to be listed on each securities exchange on
which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Conversion Shares and Warrant Shares is
then permitted under the rules of such exchange, or (ii) secure designation and
quotation of all the Conversion Shares and Warrant Shares on The Nasdaq National
Market, or (iii) if the Company is unsuccessful in satisfying the preceding
clause (i) or (ii), to secure the inclusion for quotation on The Nasdaq SmallCap
Market for such Conversion Shares and Warrant Shares and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Conversion Shares and Warrant Shares. The Company
shall pay all fees and expenses in connection with satisfying its obligation
under this Section 3(i).
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(j) In connection with any sale or transfer of Registrable
Securities pursuant to a Registration Statement, the Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the
extent applicable, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and, registered in such names as the Investors
may request.
(k) If requested by an Investor, the Company shall (i) as soon as
practicable, incorporate in each prospectus supplement or post-effective
amendment to the Registration Statement such information as an Investor
reasonably requests to be included therein relating to the sale and distribution
of the Registrable Securities, (ii) as soon as practicable, make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment, and (iii) as soon as practicable, supplement or make
amendments to any Registration Statement and prospectus if reasonably requested
by an Investor holding any Registrable Securities.
(l) The Company shall comply with all applicable rules and
regulations of the Commission in connection with any registration hereunder.
(m) Within two (2) Business Days after a Registration Statement is
ordered effective by the Commission, the Company shall deliver, and shall cause
legal counsel for the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the Commission in the form
attached hereto as Exhibit B.
(n) Notwithstanding anything to the contrary herein, at any time
after a Registration Statement has been declared effective by the Commission,
the Company may delay the disclosure of material non-public information
concerning the Company if the disclosure of such information at the time is not,
in the good faith judgment of the Board of Directors of the Company, in the best
interests of the Company (a "Grace Period"); provided, however, 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 (provided that the Company
shall not disclose the content of such material non-public information to the
Investors) and the date on which the Grace Period will begin, and (ii) notify
the Investors in writing of the date on which the Grace Period ends; provided
further, that no single Grace Period shall exceed thirty (30) consecutive days,
and during any three hundred sixty-five (365) day period, the aggregate of all
of the Grace Periods shall not exceed an aggregate of sixty (60) days and the
first day of any Grace Period must be at least ten (10) trading days after the
last day of any prior Grace Period (an "Allowable Grace Period"). For purposes
of determining the length of a Grace Period, the Grace Period shall be deemed to
begin on and include the date the Investors receive the notice referred to in
clause (i) above and shall end on and include the later of the date the
Investors receive the notice referred to in clause (ii) above and the date
referred to in such notice; provided, however, that no Grace Period shall be
longer than an Allowable Grace Period. The provisions of Section 3(g) of this
Agreement shall not be applicable during the period of any Allowable Grace
Period. Upon
9
expiration of the Grace Period, the Company shall again be bound by the first
sentence of Section 3(f) of this Agreement.
SECTION 4. OBLIGATIONS OF THE INVESTORS.
(a) At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company requires from each such Investor if
such Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular 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 effectiveness of the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. Each Investor shall promptly notify the
Company of any material change with respect to such information previously
provided to the Company by such Investor.
(b) Each Investor 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 such Registration Statement, in which case, such
Investor does not need to cooperate with the Company until it notifies the
Company of its desire to include one or more shares of the Registrable
Securities in such 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 Section 3(g) or
3(n) of this Agreement or the first sentence of Section 3(f) of this Agreement,
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statements covering such Registrable Securities
until such Investor's receipt of the copies of the amended or supplemented
prospectus contemplated by Section 3(g) of this Agreement or the first sentence
of Section 3(f) of this Agreement or receipt of notice that no amendment or
supplement is required 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 of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice (other than a single file copy, which such Investor may keep) in such
Investor's possession. Notwithstanding anything to the contrary in this
Agreement, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement, the Notes, and/or the Warrant, as
applicable, in connection with any sale of Registrable Securities with respect
to which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) of this Agreement or the first sentence of
Section 3(f) of this Agreement and for which the Investor has not yet settled.
10
SECTION 5. EXPENSES OF REGISTRATION. All expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3 of this
Agreement, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, transfer agent fees and fees
and disbursements of counsel for the Company, shall be paid by the Company. The
Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement, which amount shall be limited to Ten
Thousand Dollars ($10,000) for each Registration Statement. In addition, the
Company shall pay all of the Investors' reasonable costs (including fees and
disbursements of Legal Counsel) incurred in connection with the successful
enforcement of the Investors' rights under this Agreement.
SECTION 6. INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the Securities
Act or the Exchange Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the Commission, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto
("Indemnified Damages"), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or any amendment
(including post-effective amendments) or supplement thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which the Registrable Securities
are offered ("Blue Sky Filing"), or the omission or alleged omission to state 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 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 any) 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, (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities pursuant
to a Registration Statement, or (iv) any material violation of this Agreement by
the Company (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations"). Subject to Section 6(c) of this Agreement, the
Company shall reimburse the Indemnified Persons, 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): (i) shall not apply to
a
11
Claim by an Indemnified Person 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 such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not be available to the extent such Claim is
based on a failure of the Investor to deliver or to cause to be delivered the
prospectus made available by the Company, including a corrected prospectus, if
such prospectus or corrected prospectus was timely made available by the Company
pursuant to Section 3(d) of this Agreement; 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, conditioned or delayed. 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 of this Agreement.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a) of this Agreement, the Company, each of
its directors, each of its officers who signs the Registration Statement and
each Person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Party"), against any
Claims or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims or
Indemnified Damages arise out of or are based upon any Violation (including for
purposes of this paragraph, a material violation of this Agreement by the
Investor), 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) of this Agreement, such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnification agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7 of
this Agreement 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 or delayed; provided, further,
that the Investor shall be liable under this Section 6(b) for only that amount
of the Claims and Indemnified Damages as does not exceed the net proceeds to
such Investors as a result of the sale of Registrable Securities pursuant to
such Registration Statement. Such indemnification agreement 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 of this Agreement. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) 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) Promptly after an Indemnified Person or Indemnified Party under
this Section 6 has knowledge of any Claim as to which such Indemnified Person or
Indemnified Party reasonably believes indemnity may be sought or promptly after
such Indemnified Person or Indemnified Party receives notice of the commencement
of any action or proceeding (including
12
any governmental action or proceeding) involving a Claim, 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 such Claim, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding; provided, further, that the indemnifying party shall
not be responsible for the reasonable fees and expense of more than one (1)
separate legal counsel for such Indemnified Person or Indemnified Party. In the
case of an Indemnified Person, the legal counsel referred to in the immediately
preceding sentence shall be selected by the Investors holding at least a
majority in interest of the Conversion Shares and Warrant Shares included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a full release from all liability in
respect to such Claim and action and proceeding. After indemnification as
provided for under this Agreement, the rights of the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party as provided in this Agreement 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.
(d) 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 and when bills are received or Indemnified Damages are incurred.
(e) The indemnification agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
13
SECTION 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 of this Agreement 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 of this
Agreement, (ii) no Person involved in the sale of Registrable Securities who is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities who
is not guilty of fraudulent misrepresentation, and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement. The provisions of this Section 7 shall
remain in full force and effect, regardless of the investigation made by or on
behalf of the beneficiaries of this Section 7 and shall survive the transfer of
Registrable Securities by the Investors pursuant to Section 9 of this Agreement.
SECTION 8. REPORTING.
(a) Reports Under The 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 Commission that may at any time
permit the Investors to sell securities of the Company to the public without
registration ("Rule 144"), the Company shall use reasonable efforts to:
(1) make and keep public information available, as those
terms are understood and defined in Rule 144;
(2) file with the Commission in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(3) furnish to each Investor, so long as such Investor
owns Registrable Securities, promptly upon request, (A) a written
statement by the Company, if true, that it has complied with the
applicable reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company and copies of such other reports and
documents so filed by the Company, and (C) such other information as
may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.
(b) Rule 144A Information. The Company shall, upon request of any
Investor, make available to such Investor the information required by Rule
144A(d)(4) (or any successor rule) under the Securities Act.
SECTION 9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this
Agreement shall be automatically assignable by the Investors to any transferee
of all or any portion of such Investor's Registrable Securities if: (i) the
Investor agrees in writing with the
14
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 (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such rights are being
transferred or assigned; (iii) 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; (iv) at or before the time the Company receives 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 obligations of an Investor
under this Agreement; (v) such transfer shall have been made in accordance with
the applicable requirements of the Securities Purchase Agreement, the Notes and
the Warrants; and (vi) such transfer shall have been conducted in accordance
with all applicable federal and state securities laws.
SECTION 10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance of any provision of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least a majority of the Conversion Shares and
Warrant Shares, determined as if all of the Notes held by Investors then
outstanding have been converted into Conversion Shares and all Warrants then
outstanding have been exercised for Warrant Shares without regard to any
limitations on conversion of the Notes or on the exercise of the Warrants. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the Registrable
Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.
SECTION 11. MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile; or (iii) one (1) Business
Day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
15
Electroglas, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
16
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
If to Legal Counsel:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto as Exhibit A, with copies to such Buyer's representatives
as set forth on the Schedule of Buyers, or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission, or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
(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 waiver thereof.
(d) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting the City of
New York, borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for
17
such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(e) This Agreement, the Securities Purchase Agreement, the
Indenture, the Notes, the Warrants and the documents referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Indenture, the Securities Purchase Agreement, the
Notes and the Warrants supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9 of this Agreement, this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical 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 parties hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
(i) 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.
(j) All consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding at least a majority of the majority of
the Conversion Shares and Warrant Shares, determined as if all of the Notes held
by Investors then outstanding have been converted into Conversion Shares and all
Warrants then outstanding have been exercised for Warrant Shares without regard
to any limitations on conversion of the Notes or on the exercise of the
Warrants.
18
(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(l) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
19
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
"COMPANY"
ELECTROGLAS, INC.
By:
------------------------------------
Its:
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"▇▇▇▇▇▇▇▇▇"
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
By:
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Its:
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[Signatures of Buyers on Following Page]
S-1
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
"BUYER"
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(print full legal name of Buyer)
By:
------------------------------------------
(signature of authorized representative)
Name:
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Its:
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S-2
EXHIBIT A TO REGISTRATION RIGHTS AGREEMENT
SCHEDULE OF BUYERS
NAME OF BUYERS PRINCIPAL AMOUNT OF NOTES NUMBER OF WARRANTS
----------------------------------------- ------------------------- ------------------
1. [Name of Buyer] $
[Contact Information for Buyer]
Exhibit A-1
EXHIBIT B TO REGISTRATION RIGHTS AGREEMENT
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Date]
-----------------------
[Address]
[Address]
Attention:
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RE: ELECTROGLAS, INC.
Ladies and Gentlemen:
We are counsel to Electroglas, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement dated as of June 19, 2002 (the "Securities
Purchase Agreement"), by and among the Company, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc, and the
buyers named therein (collectively, the "Investors"), pursuant to which the
Company issued to the Investors its 5.25% Convertible Subordinated Notes due
2007 (the "Notes"), convertible into shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company and warrants exercisable for shares
of its Common Stock (the "Warrants"). Pursuant to the Securities Purchase
Agreement, the Company and the Investors also has entered into that certain
Registration Rights Agreement dated as of June 19, 2002 (the "Registration
Rights Agreement"), pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the
Notes and exercise of the Warrants under the Securities Act of 1933, as amended
(the "Securities Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on [____________] [__], 2002, the Company filed a
Registration Statement on Form S-3 (File No. 333-[_____________]) (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") relating to the Registrable Securities which names each of the
Investors and their respective transferees as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
Commission's staff has advised us by telephone that the Commission has entered
an order declaring the Registration Statement effective under the Securities Act
at [time of effectiveness] on [date of effectiveness] and, we have no knowledge,
after telephonic inquiry of a member of the Commission's staff, that any stop
order suspending its effectiveness has been issued or that any proceedings for
that
Exhibit B-1
purpose are pending before, or threatened by, the Commission and the Registrable
Securities are available for resale under the Securities Act pursuant to the
Registration Statement.
Very truly yours,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
By:
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cc: ▇▇▇▇▇ ▇. ▇▇▇▇
[Names of Investors]
Exhibit B-2