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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 5,
1999, by and among Alydaar Software Corporation, a North Carolina corporation
(the "Company"), and ▇▇▇▇▇▇▇▇ Capital Management, Inc. (the "Purchaser")
The Company has agreed, on the terms and subject to the conditions set
forth in the Securities Purchase Agreement of even date herewith (the
"Securities Purchase Agreement"), to issue and sell to the Purchaser (i) one or
more debentures (each, a "Debenture" and together, the "Debentures"), (ii)
shares (the "Preferred Shares") of the Company's Series A Convertible Preferred
Stock, par value $.001 per share (the "Preferred Stock") and (iii) one or more
warrants (each, a "Warrant" and together, the "Warrants"). The Debentures are
exchangeable, on the terms and subject to the conditions specified in the
Debentures, for Preferred Shares and are convertible into shares of the
Company's common stock, par value $.001 per share (the "Common Stock"). The
Preferred Shares are convertible into shares of Common Stock pursuant to the
terms of the Articles of Amendment relating to the Preferred Stock (the
"Articles of Amendment"). The Debentures and the Preferred Shares are
collectively referred to herein as the "Convertible Securities", the shares of
Common Stock issuable upon conversion of Convertible Securities are referred to
herein as the "Conversion Shares" and the shares of Common Stock issuable upon
exercise of the Warrants are referred to herein as the "Warrant Shares".
In order to induce the Purchaser to enter into the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and under
applicable state securities laws. Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Securities
Purchase Agreement.
In consideration of the Purchaser entering into the Securities Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings specified:
(a) "Business Day", "Tranche A Closing"", "Tranche B Closing",
"Tranche A Closing Date" and "Tranche B Closing Date" shall
have the respective meanings specified in the Securities
Purchase Agreement;
(b) "Holder" means any person owning or having the right to
acquire, through conversion of Convertible Securities or
exercise of the Warrants, Registrable Securities, including
initially the Purchaser and thereafter any permitted assignee
thereof;
(c) "Filing Deadline" means the thirtieth (30th) day following
the Tranche A Closing Date; provided, however, that if such
thirtieth day is not a Business Day, the
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Filing Deadline shall be the Business Day immediately
following such thirtieth day;
(d) "Register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration
statement or statements in compliance with the Securities Act
and pursuant to Rule 415 under the Securities Act ("Rule 415")
or any successor rule providing for the offering of securities
on a continuous or delayed basis ("Registration Statement"),
and the declaration or ordering of effectiveness of the
Registration Statement by the Securities and Exchange
Commission (the "Commission");
(e) "Registration Deadline" means the sixtieth (60th) day
following the earlier to occur of (i) the date on which the
Registration Statement is filed with the Commission and (ii)
the Filing Deadline; and
(f) "Registrable Securities" means the Conversion Shares and
the Warrant Shares, and any other shares of Common Stock
issuable pursuant to the terms of the Convertible Securities
or the Warrants, whether as a payment of a redemption price or
otherwise, and any shares of capital stock issued or issuable
from time to time (with any adjustments) in replacement of, in
exchange for or otherwise in respect of the Conversion Shares,
the Warrant Shares or such other shares.
2. MANDATORY REGISTRATION.
(a) On or before the Filing Deadline, the Company shall
prepare and file with the Commission a Registration Statement on Form S-3 as a
"shelf" registration statement under Rule 415 covering the resale of at least
175% of the number of shares of Registrable Securities then issuable on
conversion of the Convertible Securities and exercise of the Warrants then
outstanding (assuming for such purpose that such conversion or exercise were to
occur as of the date such filing is made and without regard to any restriction
or limitation on such conversion or exercise). The Registration Statement shall
state, to the extent permitted by Rule 416 under the Securities Act, that it
also covers such indeterminate number of shares of Common Stock as may be
required to effect conversion of the Convertible Securities or exercise of the
Warrants, as the case may be, to prevent dilution resulting from stock splits,
stock dividends or similar events.
(b) The Company shall use its best efforts to cause the
Registration Statement to become effective as soon as practicable following the
filing thereof, but in no event later than the Registration Deadline. The
Company shall respond promptly to any and all comments made by the staff of the
Commission on the Registration Statement (but in no event later than ten (10)
Business Days following the Company's receipt thereof), and shall submit to the
Commission, within one (1) Business Day after the Company learns that no review
of the Registration Statement will be made by the staff of the Commission or
that the staff of the Commission has no further comments on the Registration
Statement, as the case may be, a request for acceleration of the effectiveness
of the Registration Statement to a time and date not later than forty eight (48)
hours after the submission of
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such request, and maintain the effectiveness of the Registration Statement until
the earlier to occur of (i) the date on which all of the Registrable Securities
have been sold pursuant to the Registration Statement and (ii) the date on which
all of the remaining Registrable Securities (in the reasonable opinion of
counsel to the Holders of (x) the number of outstanding Registrable Securities
plus (y) the number of Registrable Securities into which the Convertible
Securities and Warrants then outstanding are convertible or exercisable, as the
case may be (at the conversion or exercise price then in effect and without
regard to any limitation on such conversion or exercise that may otherwise
apply)) may be immediately sold to the public without registration and without
regard to the amount of Registrable Securities which may be sold by a Holder
thereof at a given time (the "Registration Period").
(c) If (A) the Registration Statement is not filed on or
before the Filing Deadline or declared effective by the Commission on or before
the ninetieth (90th) day following the earlier to occur of (x) the date on which
the Registration Statement is filed with the Commission and (y) the Filing
Deadline, (B) after the Registration Statement has been declared effective by
the Commission, sales of Registrable Securities cannot be made by a Holder under
the Registration Statement for any reason not within the exclusive control of
such Holder (other than such Registrable Securities as are then freely saleable
pursuant to Rule 144(k) under the Securities Act), or (C) the Common Stock is
not listed and freely tradeable on the Nasdaq National Market System or the New
York Stock Exchange (each of (A), (B) or (C) being referred to herein as a
"Default Event"), the Company shall pay to each Holder an amount equal to the
lesser of (x) two percent (2%) per thirty calendar day period (prorated for any
period of less than thirty calendar days) and (y) the highest rate permitted by
applicable law, times either (i) the unpaid principal of and accrued interest on
the Debentures held by such Holder or (ii) the aggregate Liquidation Preference
(as defined in the Articles of Amendment) of the Preferred Shares held by such
Holder, accruing daily and compounded monthly, from the date on which a Default
Event occurs until the date on which such Default Event and any and all other
Default Events have been cured and are no longer continuing. The amounts paid or
payable by the Company hereunder shall be in addition to any other remedies
available to each Holder at law or in equity or pursuant to the terms hereof,
the Securities Purchase Agreement, the Debentures, the Articles of Amendment or
otherwise. Payments of such amounts pursuant hereto shall be made in immediately
available funds within five (5) Business Days after the end of each period that
gives rise to such obligation, provided that, if any such period extends for
more than thirty (30) days, payments shall be made at the end of each thirty-day
period.
(d) In the event that (A) the Registration Statement is
not declared effective by the one hundred and twentieth (120th) day following
the earlier to occur of (x) the date on which the Registration Statement is
filed with the Commission and (y) the Filing Deadline, (B) after the
Registration Statement has been declared effective by the Commission, sales of
Registrable Securities cannot be made by a Holder under the Registration
Statement for any reason not within the exclusive control of such Holder (other
than such Registrable Securities as are then freely saleable pursuant to Rule
144(k) under the Securities Act), (C) the Common Stock is not listed and freely
tradeable on the Nasdaq National Market System or the New York Stock Exchange,
or (D) the Company breaches, in any material respect, any material covenant or
other material term or condition of this Agreement, the Securities Purchase
Agreement, the Debentures, the Articles of Amendment or the Warrants or any
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other agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby or thereby, and such breach
continues for a period of ten (10) Business Days after written notice thereof to
the Company from a Holder (each event described in clause (A), (B), (C) or (D)
being hereinafter referred to as a "Repricing Event"), in addition to the
amounts which may be payable pursuant to paragraph 2(c) above (and any other
remedies available to the Holders), the Conversion Price (as defined in the
Debentures or Articles of Amendment, as the case may be) for any conversion of
Convertible Securities occurring on a Conversion Date (as defined in the
Articles of Amendment) following the occurrence of such Repricing Event shall be
deemed to be equal to the least of (i) the lowest Conversion Price (as defined
in the Debentures of the Articles of Amendment, as the case may be) that would
have applied had such conversion occurred during the period between the date on
which a Repricing Event occurs and the date on which such Repricing Event and
any and all other Repricing Events have been cured and are no longer continuing,
(ii) the average of the ten (10) lowest Closing Bid Prices (as defined in the
Debentures or Articles of Amendment, as the case may be) that occurred during
the period between the date on which a Repricing Event occurs and the date on
which such Repricing Event and any and all other Repricing Events have been
cured and are no longer continuing and (ii) the Conversion Price that would
otherwise be in effect on such Conversion Date.
3. PIGGYBACK REGISTRATION.
If at any time prior to the expiration of the Registration
Period, (i) the Company proposes to register shares of Common Stock under the
Securities Act in connection with the public offering of such shares for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock plan or employee stock award or a registration
on Form S-4 under the Securities Act or any successor or similar form
registering stock issuable upon a reclassification, a business combination
involving an exchange of securities or an exchange offer for securities of the
issuer or another entity) (a "Proposed Registration") and (ii) a registration
statement covering the sale of all of the Registrable Securities is not then
effective and available for sales thereof by the Holders, the Company shall, at
such time, promptly give each Holder written notice of such Proposed
Registration. Each Holder shall have thirty (30) days from its receipt of such
notice to deliver to the Company a written request specifying the amount of
Registrable Securities that such Holder intends to sell and such Holder's
intended method of distribution. Upon receipt of such request, the Company shall
use its best efforts to cause all Registrable Securities which the Company has
been requested to register to be registered under the Securities Act to the
extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of such Holder;
provided, however, that the Company shall have the right to postpone or withdraw
any registration effected pursuant to this Section 3 without obligation to the
Holder. If, in connection with any underwritten public offering for the account
of the Company or for shareholders of the Company that have contractual rights
to require the Company to register shares of Common Stock, the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in the
judgment of such underwriter(s), marketing or other factors dictate such
limitation is necessary to facilitate such offering, then the Company shall be
obligated to include in such Registration Statement only such limited portion of
the Registrable Securities with respect to which each Holder has requested
inclusion hereunder as such underwriter(s)
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shall permit. Any exclusion of Registrable Securities shall be made pro rata
among the Holders seeking to include Registrable Securities in the Registration
Statement, in proportion to the number of Registrable Securities sought to be
included by such Holders; provided, however, that the Company shall not exclude
any Registrable Securities unless the Company has first excluded all outstanding
securities, the holders of which are not entitled to inclusion of such
securities in such Registration Statement or are not entitled to pro rata
inclusion with the Registrable Securities; and provided, further, that, after
giving effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement.
4. OBLIGATIONS OF THE COMPANY.
In addition to performing its obligations hereunder, including without
limitation those pursuant to paragraphs 2(a) and 2(b) above, the Company shall:
(a) prepare and file with the Commission such amendments
and supplements to the Registration Statement and the prospectus used in
connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act or to maintain the effectiveness of the
Registration Statement during the Registration Period, or as may be reasonably
requested by a Holder in order to incorporate information concerning such Holder
or such Holder's intended method of distribution;
(b) in the event that the number of Registrable
Securities eligible for resale under the Registration Statement is insufficient
during any period of three (3) consecutive trading days to cover 125% of (i) the
number of Registrable Securities issuable to such Holder upon conversion of the
Convertible Securities and exercise of the Warrants held by such Holder
(assuming for such purpose that such conversion or exercise were to occur in
full on each of such trading days without regard to any restriction or
limitation on such conversion or exercise), plus (ii) the number of Registrable
Securities issued to such Holder and which remain unsold, the Company shall
promptly amend the Registration Statement, or file a new Registration Statement,
or both, so as to cover 175% of such Registrable Securities, in any event as
soon as practicable, but not later than the tenth Business Day following the
last day of such three day period. Any Registration Statement filed pursuant to
this Section 4 shall state that, to the extent permitted by Rule 416 under the
Securities Act, such Registration Statement also covers such indeterminate
number of additional Registrable Securities as may be required to effect
conversion of the Convertible Securities or exercise of the Warrants, as the
case may be, to prevent dilution resulting from stock splits, stock dividends or
similar events. Unless and until such amendment or new Registration Statement
becomes effective, each Holder shall have the rights described in paragraphs
2(c) and 2(d) above;
(c) secure the listing of all Registrable Securities on
the Nasdaq National Market System or the New York Stock Exchange prior to the
date on which the Registration Statement relating to such Registrable Securities
becomes effective;
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(d) furnish to each Holder such number of copies of the
prospectus included in such Registration Statement, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such Holder may reasonably request in order to facilitate the
disposition of such Holder's Registrable Securities;
(e) use all commercially reasonable efforts to register
or qualify the Registrable Securities under the securities or "blue sky" laws of
such jurisdictions within the United States as shall be reasonably requested
from time to time by a Holder, and do any and all other acts or things which may
be necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction;
(f) in the event of an underwritten public offering of
the Registrable Securities, enter into (together with all Holders proposing to
distribute Registrable Securities through such underwriting) and perform its
obligations under an underwriting agreement, in usual and customary form
reasonably acceptable to the Company, with the managing underwriter of such
offering;
(g) notify each Holder immediately upon the occurrence of
any event as a result of which the prospectus included in such Registration
Statement, as then in effect, contains an untrue statement of material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, and as promptly as practicable, prepare, file and furnish to each
Holder a reasonable number of copies of a supplement or an amendment to such
prospectus as may be necessary so that such prospectus does not contain an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(h) use all commercially reasonable efforts to prevent
the issuance of any stop order or other order suspending the effectiveness of
such Registration Statement and, if such an order is issued, to obtain the
withdrawal thereof at the earliest possible time and to notify each Holder of
the issuance of such order and the resolution thereof;
(i) furnish to each Holder, on the date that such
Registration Statement becomes effective, (x) a letter, dated such date, of
outside counsel representing the Company (and reasonably acceptable to such
Holder, it being agreed that McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP is so
acceptable) addressed to such Holder, confirming the effectiveness of the
Registration Statement and, to the knowledge of such counsel, the absence of any
stop order, and (y) in the case of an underwriting, (A) an opinion addressed to
the Holders, dated such date, of such outside counsel, in such form and
substance as is required to be given to the underwriters, and (B) a letter
addressed to the Holders, dated such date, from the Company's independent
certified public accountants, in such form and substance as is required to be
given by the Company's independent certified public accountants to such
underwriters;
(j) provide each Holder and its representatives the
opportunity to conduct a
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reasonable inquiry of the Company's financial and other records during normal
business hours and make available its officers, directors and employees for
questions regarding information which such Holder may reasonably request in
order to fulfill any due diligence obligation on its part; and
(k) permit counsel for the Holders of at least two thirds
(2/3) of (x) the number of outstanding Registrable Securities plus (y) the
number of Registrable Securities into which the Convertible Securities and
Warrants then outstanding are convertible or exercisable, as the case may be (at
the conversion or exercise price then in effect and without regard to any
limitation on such conversion or exercise that may otherwise apply) to review
the Registration Statement and all amendments and supplements thereto, and any
comments made by the staff of the Commission and the Company's responses
thereto, within a reasonable period of time prior to the filing thereof with the
Commission.
5. OBLIGATIONS OF EACH HOLDER.
In connection with the registration of the Registrable Securities
pursuant to the Registration Statement, each Holder shall:
(a) furnish to the Company in writing such information
regarding itself and the intended method of disposition of Registrable
Securities as the Company shall reasonably request in order to effect the
registration thereof;
(b) upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs 4(g) or 4(h),
immediately discontinue any sale or other disposition of Registrable Securities
pursuant to the Registration Statement until the filing of an amendment or
supplement as described in paragraph 4(g) or withdrawal of the stop order
referred to in paragraph 4(h);
(c) in the event of an underwritten offering of the
Registrable Securities, enter into a customary and reasonable underwriting
agreement and execute such other documents as the managing underwriter for such
offering may reasonably request;
(d) to the extent required by applicable law, deliver a
prospectus to the Purchaser of Registrable Securities;
(e) notify the Company when it has sold all of the Registrable
Securities theretofore held by it; and
(f) promptly notify the Company in the event that any
information supplied by such Holder in writing for inclusion in the Registration
Statement or related prospectus is untrue or omits to state a material fact
required to be stated therein or necessary to make such information not
misleading in light of the circumstances then existing.
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6. INDEMNIFICATION.
In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company shall
indemnify and hold harmless each Holder, the officers, directors, employees,
agents and representatives of such Holder, and each person, if any, who controls
such Holder within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "1934 Act"), against any losses, claims, damages,
liabilities or reasonable out-of-pocket expenses (whether joint or several)
(collectively, including legal or other expenses reasonably incurred in
connection with investigating or defending same, "Losses"), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Subject to the provisions of paragraph 6(c) below, the
Company will reimburse such Holder, and each such officer, director, employee,
agent, representative or controlling person for any legal or other expenses as
reasonably incurred by any such entity or person in connection with
investigating or defending any Loss; provided, however, that the foregoing
indemnity shall not apply to amounts paid in settlement of any Loss if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be obligated to indemnify
any person for any Loss to the extent that such Loss arises out of or is based
upon and in conformity with written information furnished by such person
expressly for use in such Registration Statement; and provided, further, that
the Company shall not be required to indemnify any person to the extent that any
Loss results from such person selling Registrable Securities (i) to a person to
whom there was not sent or given, at or prior to the written confirmation of the
sale of such shares, a copy of the prospectus, as most recently amended or
supplemented, if the Company has previously furnished or made available copies
thereof or (ii) during any period following written notice by the Company to
such Holder of an event described in Section 4(g) or 4(h).
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(b) To the extent permitted by law, each Holder, acting
severally and not jointly, shall indemnify and hold harmless the Company, the
officers, directors, employees, agents and representatives of the Company, and
each person, if any, who controls the Company within the meaning of the
Securities Act or the 1934 Act, against any Losses to the extent (and only to
the extent) that any such Losses arise out of or are based upon and in
conformity with written information furnished by such Holder expressly for use
in such Registration Statement; and such Holder will reimburse any legal or
other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of such Holder, which
consent shall not be unreasonably withheld; provided, that, in no event shall
any indemnity under this subsection 6(b) exceed the net proceeds resulting from
the sale of the Registrable Securities sold by such Holder under the
Registration Statement.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses of one such counsel to
be paid by the indemnifying party, if representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate under
applicable standards of professional conduct due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 6 with respect to such action, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 6 or
with respect to any other action unless the indemnifying party is materially
prejudiced as a result of not receiving such notice.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 6 is unavailable or insufficient to hold harmless an
indemnified party for any reason, the Company and each Holder agree, severally
and not jointly, to contribute to the aggregate Losses to which the Company or
such Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the proceeds
resulting from the sale of the Registrable Securities sold by it under the
Registration Statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such Holder. The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable
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considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each officer, director, employee, agent or representative of such Holder shall
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The obligations of the Company and each Holder under
this Section 6 shall survive the conversion or redemption, if any, of the
Convertible Securities, the exercise of the Warrant, the completion of any
offering of Registrable Securities pursuant to a Registration Statement under
this Agreement, or otherwise.
7. REPORTS.
With a view to making available to each Holder the benefits of
Rule 144 under the Securities Act ("Rule 144") and any other similar rule or
regulation of the Commission that may at any time permit such Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the 1934 Act; and
(c) furnish to such Holder, so long as such Holder owns
any Registrable Securities, forthwith upon written request (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the 1934 Act, (ii) to the
extent not publicly available through the Commission's ▇▇▇▇▇ database, a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing such Holder of any rule or regulation of the
Commission which permits the selling of any such securities without
registration.
8. MISCELLANEOUS.
(a) Expenses of Registration. All expenses, other than
underwriting discounts and commissions and fees and expenses of counsel to each
Holder, incurred in connection with the registrations, filings or qualifications
described herein, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, the fees and disbursements of
counsel for the Company, and the fees and disbursements incurred in connection
with the opinion and letter described
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in paragraph 4(i) hereof, shall be borne by the Company.
(b) Amendment; Waiver. Any provision of this Agreement
may be amended only pursuant to a written instrument executed by the Company and
Holders of at least two thirds (2/3) of (x) the number of outstanding
Registrable Securities plus (y) the number of Registrable Securities into which
the Convertible Securities and Warrants then outstanding are convertible or
exercisable, as the case may be (at the conversion or exercise price then in
effect and without regard to any limitation on such conversion or exercise that
may otherwise apply). Any waiver of the provisions of this Agreement may be made
only pursuant to a written instrument executed by the party against whom
enforcement is sought. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Holder, each future Holder, and the
Company. The failure of any party to exercise any right or remedy under this
Agreement or otherwise, or the delay by any party in exercising such right or
remedy, shall not operate as a waiver thereof.
(c) Notices. Any notice, demand or request required or
permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing and shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 5:00 p.m., eastern time, on a Business Day or, if such day is not a
Business Day, on the next succeeding Business Day, (ii) on the next Business Day
after timely delivery to a nationally-recognized overnight courier and (iii) on
the day actually received after deposit in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed to the
parties as follows:
If to the Company:
Alydaar Software Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: [J. ▇▇▇▇ ▇▇▇▇▇▇▇]
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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and if to any Holder, to such address as shall be designated by such Holder in
writing to the Company.
(d) Termination. This Agreement shall terminate on the
earlier to occur of (a) the end of the Registration Period and (b) the date on
which all of the Registrable Securities have been publicly distributed; but any
such termination shall be without prejudice to (i) the parties' rights and
obligations arising from breaches of this Agreement occurring prior to such
termination and (ii) the indemnification and contribution obligations under this
Agreement.
(e) Assignment. Upon the transfer of Convertible
Securities, Warrants or Registrable Securities by a Holder, the rights of such
Holder hereunder with respect to the securities so transferred shall be assigned
automatically to the transferee thereof as long as: (i) the Company is, within a
reasonable period of time following such transfer, furnished with written notice
of the name and address of such transferee, (ii) the transferee agrees in
writing with the Company to be bound by all of the provisions hereof and (iii)
such transfer is made in accordance with the applicable requirements of the
Securities Purchase Agreement, the Debentures, the Preferred Shares or the
Warrants, as the case may be; provided, however, that the registration rights
granted in this Agreement shall not be transferred to any person or entity that
received Registrable Securities pursuant to an effective registration statement
under the Securities Act or pursuant to a transaction under Rule 144 or any
successor provision thereto.
(f) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and all of
which together shall be deemed one and the same instrument. This Agreement, once
executed by a party, may be delivered to any other party hereto by facsimile
transmission.
(g) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to the conflict of laws provisions thereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
ALYDAAR SOFTWARE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
▇▇▇▇▇▇▇▇ CAPITAL MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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