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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JANUARY 8, 1997
---------------
AMERICAN UNITED GLOBAL, INC.
DELAWARE 0-19404 95-4359228
- ----------------- ---------------- -------------
(State or other (Commission File (IRS Employer
jurisdiction of No.) ID No.)
incorporation)
11130 NE 33RD PLACE, SUITE 250, BELLEVUE, WASHINGTON 98004
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(Address of principal executive offices)
(206) 803-5400
--------------------------------------------------
Registrant's telephone number, including area code
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(Former name or former address, if changed since last report)
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ITEM 5 - OTHER EVENTS.
On January 8, 1997, American United Global, Inc. ("AUGI"), a Delaware
corporation, sold, in a private placement transaction, 400,000 shares of AUGI's
newly-created Series B-2 Preferred Stock (the "Preferred Stock") for an
aggregate purchase price of $10,000,000 in cash. AUGI also sold warrants, for
$0.01 per warrant (the "AUGI Warrants"), to purchase an additional 350,000
shares of AUGI's Common Stock.
The Preferred Stock carries a 7.00% per annum dividend, payable quarterly,
and is non-voting except on certain extraordinary transactions. Holders of the
Preferred Stock may convert the Preferred Stock into AUGI Common Stock on a
cumulative vesting schedule commencing February 7, 1997, with all of the
Preferred Stock being convertible after April 8, 1997. The conversion price per
share of AUGI Common Stock is the lesser of (a) $8.5772 per share, (b) 105% of
the average daily closing bid price of the AUGI Common Stock for the ten (10)
trading days (the "Average Price") immediately preceding January 8, 1998, or (c)
82.5% of the Average Price immediately preceding the date of conversion. The
Company may limit the holders' right of conversion in certain circumstances
prior to January 2000, after which all of the remaining Series B-2 Preferred
will be converted at the above formula price then in effect.
The AUGI Warrants, which are exercisable at $8.5772 per share, expire in
January 2002 to the extent unexercised. In addition, AUGI agreed that if its
eXodus Technologies, Inc. subsidiary were ever to make an initial public
offering of its securities in the future, upon consummation of such an offering
the private placement investors would have the right to purchase, for $0.01
each, five-year warrants to purchase up to 350,000 shares of eXodus common stock
(the "eXodus Common Stock") at an exercise price equal to the price per share at
which eXodus Common Stock is so offered to the public (the "eXodus Warrants").
Those shares of eXodus Common Stock would carry customary "piggyback"
registration rights and one demand registration right.
AUGI will use the net proceeds from the private placement to reduce bank
debt and for additional working capital to finance the acquisition and
development program for its technology business.
AUGI has agreed with the private placement investors to file a Registration
Statement with the Securities and Exchange Commission (THE "Commission") for the
Distribution of the Augi Common Stock Issuable upon the Conversion of the
Preferred Stock and upon Exercise of the Augi Warrants. If the Registration
Statement is not declared effective by the commission by may 8, 1997, AUGI will
be required to pay daily liquidated damages to the private placement investors
which could amount to as much as $300,000 per month. AUGI Intends to File the
Registration Statement with the Commission by January 31, 1997.
2
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ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
None.
(b) PRO FORMA FINANCIAL STATEMENTS
None.
(c) EXHIBITS
10.1 Subscription Agreement, dated January 3, 1997, by and
between AUGI and the investors in the private placement.
10.2 AUGI Registration Rights Agreement, dated January 3, 1997,
by and between AUGI and the investors in the private
placement.
10.3 Registration Rights Agreement, dated January 3, 1997, by and
between eXodus Technologies, Inc. and the investors in the
private placement.
10.4 Warrant to Purchase Common Stock of AUGI, dated January 8,
1997, by and between AUGI and the investors in the private
placement.
10.5 Certificate of Designation, Preferences and Rights of Series
B-2 Preferred Stock of AUGI dated January 8, 1997.
10.6 Amendment to Certificate of Designation Certificate of
Decrease of Series B Preferred Stock of AUGI dated
January 8, 1997.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
AMERICAN UNITED GLOBAL, INC.
(Registrant)
Dated: January 21, 1997 By:/s/ David M. Barnes
--------------------------------------
David M. Barnes, Vice President
and Chief Financial Officer
4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
AMERICAN UNITED GLOBAL, INC.
(Registrant)
Dated: January 21, 1997 By: /s/ David M. Barnes
----------------------------------------
David M. Barnes, Vice President
and Chief Financial Officer
5
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INDEX TO EXHIBITS
SEQUENTIAL
PAGE
EXHIBIT DESCRIPTION NUMBER
- ------- --------------------------------------------------------- ------
10.1 Subscription Agreement, dated January 3, 1997,
between AUGI and the buyers.
10.2 AUGI Registration Rights Agreement, dated January 3,
1997, by and between AUGI and the holders.
10.3 Registration Rights Agreement, dated January 3, 1997,
by and between exodus Technologies, Inc. and the holders.
10.4 Warrant to Purchase Common Stock of AUGI, dated
January 8, 1997, by and between AUGI and the
holders.
10.5 Certificate of Designation, Preferences and Rights of
Series B-2 Preferred Stock of AUGI dated January 8, 1997.
10.6 Amendment to Certificate of Designation Certificate of
Decrease of Series B Preferred Stock of AUGI dated
January 8, 1997.
6
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EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER
(THE "ACT"), AND NO INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION UNDER
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
AMERICAN UNITED GLOBAL, INC.
7% Series B-2 Convertible Preferred Stock and Warrants
THIS SECURITIES SUBSCRIPTION AGREEMENT dated January 3,
1997 (this "Agreement"), is executed in reliance upon the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended
(the "Act"). Capitalized terms used herein and not defined shall have the
meaning given to them in said Section 4(2) or the rules and regulations
promulgated pursuant thereto.
THIS AGREEMENT has been executed by the undersigned
("Buyer") in connection with the private placement of 7% Series B-2
Convertible Preferred Stock of American United Global, Inc., a corporation
organized under the laws of the State of Delaware ("Seller") and certain
related warrants. Buyer and Seller hereby agree with each other as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) SUBSCRIPTION. The undersigned Buyer hereby subscribes for and
agrees to purchase that number of shares of the Seller's Series B-2 Convertible
Preferred Stock (the Series B-2 Convertible Preferred Stock being hereinafter
referred to as the "Preferred Shares"), par value $0.01 per share (which shares
are convertible on the terms and conditions set forth in the instruments
governing the Preferred Shares into a certain number of shares (the "AUGI
Conversion Shares") of the common stock of the Seller, $0.01 par value per share
(the "AUGI Common Stock")). The undersigned Buyer also hereby subscribes for
and agrees to purchase a certain number of warrants (the "AUGI Warrants") to
purchase a certain number of shares (the "AUGI Warrant Shares") of the AUGI
Common Stock. Pursuant to SECTION 3(O)(B) of this Subscription Agreement, the
Buyer also shall have the right, on the terms and conditions set forth in said
SECTION 3(O)(B), to acquire a certain number of warrants (the "eXodus Warrants")
to purchase a certain number of shares (the "eXodus Warrant Shares") of the
common stock (the "eXodus Common
<PAGE>
Stock") of eXodus Technologies, Inc. ("eXodus"), a corporation which is a
subsidiary of the Seller. The Preferred Shares, the AUGI Conversion Shares,
the AUGI Warrants, and the AUGI Warrant Shares and, if they become issuable
in the future in accordance with the terms of SECTION 3(O)(B) of this
Subscription Agreement, the eXodus Warrants and the eXodus Warrant Shares,
are sometimes hereinafter referred to as the "Securities". The number of
shares of Preferred Shares and the number of AUGI Warrants the Buyer hereby
subscribes for and agrees to purchase are set forth below Buyer's name on the
signature page hereof, and the aggregate purchase price (the "Purchase
Price") for such number of Preferred Shares and AUGI Warrants (NOT including
the additional price to be paid in order to exercise the AUGI Warrants or to
acquire and exercise the eXodus Warrants, should the same become issuable) is
also set forth below Buyer's name on the signature page hereof.
(b) PAYMENT. The Purchase Price for the Preferred Shares shall be
payable at closing by delivering to the Seller's account immediately available
funds in United States Dollars by wire transfer for closing against delivery of
securities.
(c) CLOSING. Subject to the satisfaction of the conditions set forth
in SECTIONS 7 and 8 hereof, the closing of the transactions contemplated by this
Agreement shall occur on January 6, 1997, or such earlier or later date as is
mutually agreed to in writing by the Buyer and the Seller (the "Closing Date").
2. BUYER REPRESENTATIONS; ACCESS TO INFORMATION.
(a) PRIVATE TRANSACTION. In connection with the purchase and sale of
the Securities, Buyer represents and warrants to, and covenants and agrees with,
Seller as follows:
(i) Buyer is one of the following:
A. an investment company as defined in Section 3(a)
of the Investment Company Act of 1940 which is exempt from
registration pursuant to Section 3(c)(1) of such Act, and each
of the equity owners therein is an individual whose net worth
as of the date hereof exceeds $1,000,000; or
B. a partnership, corporation, or a Massachusetts or
similar business trust (i) which has a net worth as of the date
hereof in excess of $1,000,000, (ii) which is neither an
investment company as defined in Section 3(a) of the Investment
Company Act of 1940 which is required to be registered under
such Act nor an investment company as so defined which is
exempt from registration pursuant to Section 3(c)(1) of such
- Page 2 -Subscription Agt.
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Act and was not formed for the specific purpose of acquiring the
Securities and has total assets as of the date hereof in excess
of $5,000,000.
(b) Buyer (or its Purchaser Representative, if any, who has been
designated by it and whose name and address, if one has been so designated,
appears below Buyer's signature on the signature page hereof) is entering
into this Agreement relying solely on the facts and terms set forth in this
Agreement and the "SEC Documents" (as defined below), given to it by Seller,
and Buyer has received copies of all such documents and Seller has not made
any representations of any kind or nature to induce Buyer to enter into this
Agreement except as specifically set forth in such documents;
(c) Buyer (or such Purchaser Representative) has made an
investigation of the pertinent facts relating to the operation of Seller;
(d) Buyer (or such Purchaser Representative) has such knowledge and
experience in financial and business matters generally and of this nature in
particular that Buyer is capable of evaluating the merits and risks of an
investment in Seller. Buyer has adequate means of providing for Buyer's
current needs and contingencies, and has no need for liquidity of the
investment being made hereby, and Buyer is able to bear the economic burden
of holding the investment contemplated hereby indefinitely, and to bear the
economic risk of a complete loss of Buyer's investment in the Seller;
(e) Buyer understands that the Securities have not been registered
under the Act nor pursuant to the provisions of the securities or other laws
of any applicable jurisdiction, and that the Securities must be held by the
Buyer indefinitely, and neither the Securities or any interest therein may be
sold, transferred, or disposed of (i) unless a registration statement with
respect to such Securities has become effective under the Act, or (ii) an
exemption from such registration is available under the circumstances of the
applicable transaction and the Company has been furnished with an opinion of
counsel, satisfactory in form and substance to it, that such registration is
not required, and that the certificates evidencing the Securities will bear a
legend to such effect;
(f) No person is acting or authorized to act as Buyer's Purchaser
Representative in connection with Buyer's purchase of the Securities, except
the person, if any, set forth on the signature page of this Agreement as
Buyer's Purchaser Representative;
- Page 3 -Subscription Agt.
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(g) This Agreement has been duly authorized, validly executed and
delivered on behalf of Buyer and is a valid and binding agreement enforceable
against Buyer in accordance with its terms;
(h) The execution and delivery of this Agreement and the
consummation of the purchase of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Buyer of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws (or similar
constructive documents) of Buyer or any indenture, mortgage, deed of trust,
or other material agreement or instrument to which Buyer is a party or by
which Buyer or any of Buyer's properties or assets are bound, or any existing
applicable law, rule or regulation of the United States or any State thereof
or any applicable decree, judgment or order of any Federal or State court, or
State regulatory body, administrative agency or other United States
governmental body having jurisdiction over Buyer or any of Buyer's properties
or assets;
(i) All invitations, offers and sales of or in respect of, any of
the Securities, by Buyer and any distribution by Buyer of any documents
relating to any offer by Buyer of any of the Securities will be in compliance
with applicable laws and regulations and will be made in such a manner that
no prospectus need be filed and no other filing need be made by Seller with
any regulatory authority or stock exchange in any country or any political
sub-division of any country;
(j) Buyer is acquiring the Securities for its own account and not
as nominee for any person or entity, and is acquiring the Preferred Shares
and the AUGI Warrants and, if Buyer should acquire any of the same, the other
Securities, for investment and not with a view toward the resale, transfer,
or other distribution, or subdivision or other fractionalization of the same.
However, if Buyer should ever seek to sell, transfer, or otherwise dispose of
any of the Securities in the future, Buyer will not make any offer or sale of
any of the Securities by any means which would not comply with the laws and
regulations of the territory in which such offer or sale takes place or to
which such offer or sale is subject or which would in connection with any
such offer or sale impose upon Seller any obligation to satisfy any public
filing or registration requirement or to provide or publish any information
of any kind whatsoever or otherwise undertake or become obliged to do any act;
(k) Buyer understands that no Federal or State or foreign
government agency has passed on or made any recommendation or endorsement of
the Securities;
- Page 4 -Subscription Agt.
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(l) Buyer acknowledges that it and its advisors, if any, have been
had full and sufficient opportunity to ask questions of the Seller concerning
the terms and conditions of the offering of the Securities and regarding the
business of the Seller and its subsidiaries and their respective businesses,
and have been furnished with all materials relating to the business, finances
and operations of Seller and its subsidiaries and all materials relating to
the offer and sale of the Securities which have been requested by Buyer.
Buyer further acknowledges that it and its advisors, if any, have received
complete and satisfactory answers to such inquiries, but that Buyer has not
received from or on behalf of the Seller any projections on which Buyer has
relied by or concerning the Seller or its business, assets, properties, and
securities other than reports, if any, included in the SEC Documents;
(m) Buyer acknowledges that the purchase of the Securities
involves a high degree of risk, including the total loss of Buyer's
investment. Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
purchasing the Securities.
3. SELLER REPRESENTATIONS.
Seller represents and warrants to Buyer as follows:
(a) Seller has furnished Buyer with copies of the SEC Documents (as
defined below);
(b) Upon execution of this Agreement, Seller has and shall have
authorized and reserved for issuance at all times that number of shares of
Common Shares which would be issuable to the Buyer at any time upon tender of
notice of conversion of the Preferred Shares and/or the exercise of the AUGI
Warrants. Seller agrees that violation of this representation and warranty
shall cause irreparable harm to Buyer, and shall entitle Buyer to seek an
order of specific performance;
(c) The Securities, when issued and delivered in accordance with
their respective terms, will be duly and validly authorized and issued,
fully-paid (assuming, with respect to AUGI Warrant Shares and eXodus Warrant
Shares, payment of the exercise price therefor pursuant to the related AUGI
Warrants and eXodus Warrants) and non-assessable and will not subject the
holders thereof to personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of Seller with respect to the
Securities;
(d) This Agreement has been duly authorized, validly executed and
delivered on behalf of Seller and is a valid and
- Page 5 -Subscription Agt.
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binding agreement enforceable against Seller in accordance with its terms;
(e) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Seller of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws (or similar
constructive documents) of Seller, or any indenture, mortgage, deed of trust
or other material agreement or instrument to which Seller is a party or by
which it or any of its properties or assets are bound, or any existing
applicable decree, judgment or order of any court, Federal or State
regulatory body, administrative agency or other governmental body having
jurisdiction over Seller or any of its properties or assets;
(f) Seller is not aware of any authorization, approval or consent
of any governmental body which is legally required for the issuance and sale
of the Securities as contemplated by this Agreement except for the filing of
the registration statement pursuant to the Act which is a condition
precedent, set forth in the AUGI Warrant, to the offer of the eXodus Warrants
to the Buyer in the future;
(g) Upon conversion of the Preferred Shares and/or exercise of the
AUGI Warrants, Seller will instruct its transfer agent to issue one or more
certificates representing the applicable number of AUGI Conversion Shares or
AUGI Warrant Shares, as the case may be, in the name of Buyer, with
restrictive legends pertaining to the issuance of the same without
registration under the Act, in such denominations as may be specified by
Buyer prior to conversion. (In the event that the conditions precedent to the
issuance of the eXodus Warrants are satisfied and Buyer acquires any of the
same, Seller will cause eXodus to do the same upon exercise of any eXodus
Warrants, which eXodus Warrants and the corresponding eXodus Warrant Shares
shall bear a corresponding restrictive legend.) Seller further warrants that
no such instructions other than these instructions, and instructions for a
"stop transfer" until the end of the applicable restricted period have been
given to the transfer agent and also warrants that, upon issuance, the AUGI
Conversion Shares and the AUGI Warrant Shares shall otherwise be freely
transferable on the books and records of Seller subject to compliance with
Federal and State securities laws. Seller will notify the transfer agent of
the Closing Date. Nothing in this Section shall affect in any way Buyer's
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities;
(h) Subject to the immediately preceding SUB-PARAGRAPH (G), Seller
has taken no action that will affect in any way
- Page 6 -Subscription Agt.
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the running of the applicable restricted period with regard to the Buyer or
the ability of Buyer to freely resell the Securities in accordance with
applicable securities laws and this Agreement;
(i) Seller will comply with all applicable securities laws with
respect to the sale of the Securities, including but not limited to the
filing of all reports required to be filed in connection therewith the
Securities and Exchange Commission (the "SEC") or any stock exchange or
NASDAQ or any other regulatory authority;
(j) During the period from July 31, 1996 to the date hereof,
Seller has filed its annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and definitive proxy statements with
respect to Seller's annual meetings of shareholders with the SEC (the "SEC
Documents"), which are all the documents (other than preliminary material)
that Seller was required to file with the SEC since such date. As of their
respective dates, none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and no material
event has occurred since the filing on November 13, 1996 of Seller's 1996
Report on Form 10-K, and the related amendment on Form 10-KA filed on
December 12, 1996 which could make any of the disclosures contained therein
misleading. The financial statements of Seller included in the SEC Documents
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited
financial statements, as may be permitted by Form 10-Q of the SEC) and such
statements together with the notes thereto fairly present (subject in the
case of unaudited financial statements, only to normal recurring year-end
audit adjustments) the consolidated financial position of Seller and its
consolidated subsidiaries as at the dates thereof and the consolidated
results of their operations and changes in financial position for the periods
then ended;
(k) Neither Seller nor agents of the Seller have purchased any
securities of the Seller in open market transactions on the NASDAQ for the 30
days immediately preceding the date of this Agreement;
(l) This Agreement and the SEC Documents supplied by Seller to
Buyer in connection herewith do not contain an untrue statement of a material
fact nor omit to state a material fact necessary to make the statement
therein not misleading;
- Page 7 -Subscription Agt.
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(m) As set forth in the Certificate of Designations for the
Preferred Shares, a copy of which is annexed as Exhibit "A" hereto, the
material terms of the Preferred Shares are as follows:
i. $0.01 per share par value;
ii. liquidation preference $25.00 per share;
iii. dividend 7.00% per annum, payable quarterly, in cash or in
kind with additional shares of Preferred Shares, at the
Seller's option;
iv. Preferred Shares not previously converted into AUGI
Conversion Shares shall be automatically converted into
Conversion Shares at the end of three years from the Closing
Date (December 31, 1999) at the conversion price described
below;
v. voting rights - none except in limited circumstances
involving the authorization of additional shares of AUGI
Common Stock or mergers or consolidations;
vi. convertible at option of holder:
(A) 34% 60 days after issuance;
(B) 67% in the aggregate 90 days after issuance; and
(C) 100% in the aggregate 120 days after issuance,
with share certificates tendered promptly after proper
conversion by the holder.
vii. all Preferred Shares are convertible, as aforesaid, into
shares of AUGI Common Stock at a price equal to the LESSER
of (A) or (B):
(A) 105% of the average daily closing bid price of
the AUGI Common Stock as reported on The Nasdaq
National Market or other national securities
exchange for the ten (10) trading days (the
"Average Price") immediately preceding the
Closing Date (the "Closing Date Average
Price"); PROVIDED, that if the Average Price
immediately preceding the first anniversary
of the Closing Date (the "Anniversary Average
Price")
- Page 8 -Subscription Agt.
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shall be LESS than the Closing Date Average
Price, the conversion price set forth in this
clause (A) shall be reset to equal 105% of
the Anniversary Average Price; or
(B) 82.5% of the Average Price immediately
preceding the date any shares of
Preferred Shares are converted into AUGI
Common Stock (the "Conversion Date
Average Price");
viii. In the event that the Average Price of the AUGI Common
Stock calculated at any time on or after the date six
(6) months after the effective date of the Form S-3
registration statement of the Seller referred to below
(the "Restriction Commencement Date"), and prior to the
date of conversion, shall be $3.50 or less, the Seller
shall have the right to RESTRICT the rights of the
holders to convert the Preferred Shares into AUGI
Common Stock in the manner provided below.
(A) PERCENTAGE CONVERSIONS. Not more than
20% of the total number of shares of
Preferred Shares originally purchased by
a holder may be converted into AUGI
Common Stock in any interval of
consecutive thirty (30) calendar days (a
"Conversion Window"), with each such
Conversion Window measured from the
Restriction Commencement Date.
(B) STANDSTILL. On not more than ONE
occasion in every six month period,
measured from the Restriction
Commencement Date, the Seller will have
the right to impose a 30-calendar day
"standstill" on the holders of the
Preferred Shares, pursuant to which they
may NOT convert the Preferred Shares.
Such "standstill" right will be
implemented, as follows:
(i) if any holder elects to convert,
such holder shall notify the Seller by
hand or fax as to such holder's
intention to convert and
- Page 9 -Subscription Agt.
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the number of Preferred Shares to be
converted;
(ii) the Seller must respond by notice
by hand or by fax within 48 hours as to
whether the Seller wants to impose the
"standstill" (silence means that the
Seller will permit a conversion into
AUGI Common Stock). If the Seller gives
timely notice of desiring the standstill
it is good for 30 days from the date of
notice. If the Seller approves a
conversion or does not respond and
holder does NOT convert the Preferred
Shares into AUGI Common Stock within
such 30 day period, the Seller's right
to impose a standstill shall resume for
the next 30 day period.
(n) As set forth in the form of Warrant annexed hereto as Exhibit
"B", the material terms of the AUGI Warrants are as follows:
(i) Warrants, purchased for $0.01 per each share of AUGI
Common Stock purchasable upon exercise thereof, shall be for the
purchase of 35,000 shares of Common Stock of Seller for each $1
million of Preferred Shares or part thereof purchased by Buyer
(subject to standard anti-dilution provisions);
(ii) Warrants shall expire five years from Closing Date;
and
(iii) Warrants are exercisable at any time prior to
expiration for an exercise price per share of AUGI Common Stock
equal to the Closing Date Average Price.
(o) eXodus is a subsidiary of the Seller. Seller hereby
covenants and agrees, in its capacity as the controlling shareholder
of eXodus, to cause eXodus to perform such that, in the event of an
initial public offering by eXodus of eXodus Common Stock, the Buyer
shall have the right to purchase, for $0.01 per warrant to acquire one
share of eXodus Common Stock, a number of eXodus Warrants on the
following terms and conditions:
(A) the "eXodus IPO" shall be defined as the time at
which eXodus shall consummate an initial public offering of
eXodus Common Stock, alone or in combination with other
eXodus securities, pur-
- Page 10 -Subscription Agt.
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suant to a registration statement filed by eXodus pursuant to the
Act and declared effective by the SEC;
(B) In the event that eXodus determines to engage in an
eXodus IPO, eXodus shall cause to be mailed to the Buyer, at the
Buyer's address for notices pursuant to this Subscription
Agreement, not less than 30 days before filing any such
registration statement written notice of its intention to do so
and offer to the Buyer the right to purchase, effective upon the
eXodus IPO, the number of eXodus Warrants calculated pursuant to
PARAGRAPH 3(O)(C) of this Subscription Agreement. Failure by the
Buyer to accept such offer in writing and make payment for the
aforesaid eXodus Warrants within 25 days after the giving of such
notice by eXodus shall cause the Buyer's right to acquire the
eXodus Warrants to be terminated. Notwithstanding any notice by
eXodus of its intention to engage in an eXodus IPO, or any
acceptance by Buyer pursuant hereto, eXodus shall be under no
obligation to continue its efforts to effect any such
registration statement and may terminate or abandon the same at
any time prior to the effective date of any such registration
statement. If eXodus so terminates or abandons its effort to
engage in an eXodus IPO, the right of Buyer to purchase eXodus
Warrants pursuant to this PARAGRAPH 3(O)(B) upon the
effectiveness of any eXodus IPO shall be revived, notwithstanding
the Buyer's determination not to accept any such prior offer;
(C) the Buyer shall have the right to purchase, as
aforesaid, the number of eXodus Warrants which would entitle the
Buyer to purchase, in the aggregate, the number of shares of
eXodus Common Stock equal to the number of shares of AUGI Warrant
Common Stock which may be acquired upon exercise by the Buyer of
the AUGI Warrants acquired by the Buyer pursuant to this
Subscription Agreement (that is, eXodus Warrants for 35,000
shares of eXodus Common Stock for each $1,000,000 of Preferred
Shares acquired by the Buyer pursuant to this Subscription
Agreement), at an exercise price per share of eXodus Common
Stock equal to the price per share at which the eXodus Common
Stock is offered to the public in an eXodus IPO;
(D) each eXodus Warrant will be a five (5) year warrant (as
calculated from the date of issuance thereof);
- Page 11 -Subscription Agt.
<PAGE>
(E) The eXodus Warrants shall otherwise be on terms
substantially identical to the AUGI Warrants;
(F) On the date hereof, the Seller and the Buyer are
entering into a certain Registration Rights Agreement covering,
among other things, certain registration rights and obligations
of the Buyer in the event that the Buyer acquires eXodus
Warrants, pursuant to which the shares of eXodus Common Stock
issuable upon exercise of the eXodus Warrants shall be subject to
customary piggyback registration rights and one demand
registration right FOLLOWING completion of the eXodus IPO, but
shall be subject to restrictions on sale pursuant to customary
"lock-up agreements" (but in no event for more than 180 days)
with the representative of the underwriters of the eXodus IPO on
terms which shall be no less favorable to the holders of eXodus
Warrants than similar agreements with the Seller and other eXodus
stockholders at the time of the eXodus IPO.
(p) Seller will as promptly as practicable (but, in any event, within
thirty (30) days after the Closing Date) file at Seller's sole expense, a
registration statement on Form S-3 under the Act (or in the event that Seller is
ineligible to use Form S-3 such other form as Seller is eligible to use under
the Act) (the "Registration Statement") covering the resale of the AUGI
Conversion Common Shares issuable on conversion of the Preferred Shares and the
AUGI Warrant Shares issuable upon exercise of the AUGI Warrants, and shall take
all action reasonably necessary to qualify the AUGI Conversion Shares and the
AUGI Warrant Shares under all applicable State "blue sky" laws PROVIDED, that in
no event shall the Seller be required to take any action which would cause the
Seller to be qualified to do business or acceptable to service of process for
general purposes in any State. Any such registration statement shall remain
effective for the period ending twenty four (24) months after the initial
issuance of the Preferred Shares or until all of the AUGI Conversion Shares and
the AUGI Warrant Shares are sold pursuant to the Registration Statement,
whichever is earlier. The Seller shall provide the Buyer with such numbers of
copies of the prospectus as shall be reasonably requested to facilitate the sale
of the AUGI Conversion Shares pursuant to the Registration Statement;
(q) Seller shall use its best efforts to cause the Registration
Statement to be declared effective by the SEC within one hundred twenty (120)
days after the Closing Date. In the event the Registration Statement is not
declared effective by the SEC within such one hundred twenty (120) day
- Page 12 -Subscription Agt.
<PAGE>
period, the Seller shall pay liquidated damages in cash per day to the holders
of the Preferred Shares, in the aggregate, equal to $5,000 per day until the
Registration Statement is declared effective; PROVIDED, that if the Registration
Statement has not been declared effective within one hundred fifty (150) days of
the Closing Date, the Seller shall, following such one hundred fifty (150) day
period, pay liquidated damages in cash per day, in the aggregate, equal to
$10,000 per day or (a maximum of $300,000 per month) until the Registration
Statement is declared effective. Notwithstanding the foregoing, if the Seller
shall timely file such Registration Statement with the SEC, the one hundred
twenty (120) and one hundred fifty (150) day time periods referred to above each
shall be increased by one day for each day more than forty-five (45) days that
the SEC does not furnish its complete comments on the initial filing of the
Registration Statement by the Seller;
(r) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Seller of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws of Seller, or any
indenture, mortgage, deed of trust, or other material agreement or instrument
to which Seller is a party or by which Seller or any of its properties or
assets are bound, or any existing applicable law, rule, or regulation of the
United States or any State thereof or any applicable decree, judgment, or
order of any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body having
jurisdiction over Seller or any of its properties or assets; and
(s) Seller is not legally required to obtain any authorization,
approval or consent of any governmental body for the issuance and sale of the
Securities to Buyer pursuant to this Agreement, other than compliance with
applicable securities laws as contemplated under this Subscription Agreement.
4. EXEMPTION; RELIANCE ON REPRESENTATIONS.
Buyer understands that Seller is offering and selling the Securities
pursuant to this Subscription Agreement without registering the same under
the 1933 Act in reliance upon the representations and warranties of the Buyer
hereunder as the basis for the availability of an exemption from registration
under Section 4(2) of the Act.
- Page 13 -Subscription Agt.
<PAGE>
5. TRANSFER AGENT INSTRUCTIONS.
Upon the conversion of the Preferred Shares or the exercise of any
AUGI Warrant, the holder thereof shall submit such Preferred Shares or
Warrant, as the case may be, to Seller, and Seller shall, within three (3)
business days of receipt of such Preferred Shares or AUGI Warrant, as the
case may be, together with applicable properly completed documentation and
payment (in the case of AUGI Warrants), instruct Seller's transfer agent to
issue one or more certificates representing the number of shares of AUGI
Common Stock into which the Preferred Shares are convertible in accordance
with the provisions regarding conversion set forth in the Certificate of
Designations or the AUGI Warrants, as the case may be. Seller shall cause
eXodus to covenant to take similar actions with regard to the eXodus Warrants
and the eXodus Warrant Shares if the same shall be issued. Nothing in this
SECTION 5, however, shall affect or limit in any way any holder's obligations
and agreement to comply with all applicable securities laws upon resale of
the Securities.
6. CONDITIONS TO SELLER'S OBLIGATION TO SELL.
Seller's obligation to sell the Securities is conditioned upon:
(a) The receipt and acceptance by Buyer of this Agreement and all
related agreements as evidenced by execution of this Agreement and such
agreements by Buyer and delivery of the same to the Seller.
(b) Delivery to the Seller's account by wire transfer of the
aggregate Purchase Price for the number Preferred Shares and AUGI Warrants
set forth beneath the Buyer's name on the signature pages of this
Subscription Agreement in immediately available funds in United States
Dollars PROVIDED, that notwithstanding the foregoing the Buyer shall not be
entitled to acquire the AUGI Warrant Shares, the eXodus Warrants, or the
eXodus Warrant Shares without paying the additional consideration therefor
set forth in this Subscription Agreement and otherwise complying with the
terms and conditions of the instruments evidencing the same.
(c) Compliance by the Buyer with all applicable securities laws
pertaining to the offer and sale of the Preferred Shares and the AUGI
Warrants (and, when the same are issued, the AUGI Conversion Shares, the
eXodus Warrants and the eXodus Warrrant Shares).
(d) Buyer's representations and warranties being true and accurate
as of the Closing Date.
- Page 14 -Subscription Agt.
<PAGE>
(e) The absence of any action or threat of action, at law or in
equity, arising out of or in connection with or relating to this Subscription
Agreement or the transactions contemplated hereby, seeking to prohibit the
consummation of, or materially alter the terms of, the same, or damages or
other relief in respect of the same materially adverse to the Seller or
eXodus.
7. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
Buyer's obligation to purchase the Preferred Shares and the Warrants
is conditioned on:
(a) The receipt and acceptance by Seller of this Agreement and all
related agreements as evidenced by execution of this Agreement and such
agreements by the duly authorized officer of Seller.
(b) Seller's representations and warranties being true and accurate
as of the Closing Date.
(c) Delivery (against payment to the Seller therefor in accordance
with the terms and conditions of this Subscription Agreement) of the
certificates evidencing the number of Preferred Shares and AUGI Warrants set
forth beneath the Buyer's name on the signature pages of this Agreement to
the Buyer at the Buyer's address set forth beneath the Buyer's name on the
signature pages of this Agreement.
(d) Compliance by the Seller with all applicable securities laws
pertaining to the offer and sale of the Preferred Shares and the AUGI
Warrants (and, when the same are issued, the AUGI Conversion Shares, the
eXodus Warrants and the eXodus Warrrant Shares).
(e) The absence of any action or threat of action, at law or in
equity, arising out of or in connection with or relating to this Subscription
Agreement or the transactions contemplated hereby, seeking to prohibit the
consummation of, or materially alter the terms of, the same, or damages or
other relief in respect of the same materially adverse to the Seller or
eXodus.
8. NO SHAREHOLDER APPROVAL.
Seller hereby agrees that from the Closing Date until the issuance
of shares of AUGI Common Stock upon the conversion of the Preferred Shares or
the exercise of the Warrants, Seller will not take any action which would
require Seller to seek shareholder approval of such issuance. Seller shall
at all times keep that number of shares available from its
- Page 15 -Subscription Agt.
<PAGE>
authorized but unissued share capital for the purposes of those conversions or
exercises.
9. MISCELLANEOUS.
(a) Except as specifically referenced herein, this Agreement
constitutes the entire contract between the parties, and neither party shall
be liable or bound to the other in any manner by any warranties,
representations or covenants except as specifically set forth herein. Any
previous agreement among the parties related to the transactions described
herein is superseded hereby. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties hereto PROVIDED, that the Buyer may not assign any
of its rights and obligations under this Subscription Agreement without the
prior written consent of the Seller, which shall not be unreasonably
withheld. Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided herein.
(b) All representations and warranties contained in this Agreement
by Seller and Buyer shall survive the closing of the transactions
contemplated by this Agreement.
(c) This Agreement shall be construed in accordance with the
internal laws of the State of New York. The parties agree to submit to the
jurisdiction of the state and federal courts located in the Borough of
Manhattan, City and State of New York, for the adjudication of any disputes
arising out of or in connection herewith. This Agreement may be executed in
counterparts, and the facsimile transmission of an executed counterpart to
this Agreement shall be effective as an original.
- Page 16 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Robert M. Rubin
Name: Robert M. Rubin
Title: President
By:_____________________________
Title:__________________________
Tax I.D. #:
Address:
Attn:
No. of Preferred Shares:
No. of AUGI Warrants:
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:__________________________
Title:__________________________
THE GALILEO FUND, L.P.
By: DDJ Galileo, LLC, its General Partner
By: /s/
-----------------------------
Title: Member
Tax I.D. #: 04-3258283
-------------------
Address: 141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC DDJ Galileo Fund, L.P.
No. of Preferred Shares:
112,800
------------------------
No. of AUGI Warrants:
98,700
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$2,820,987.00
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
CROCODILE I, LLC
By: DDJ Capital Management, Inc.
Pursuant to a Power of Attorney
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Crocodile I, LLC
c/o DDJ Capital Management, LLC
141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC Crocodile I, LLC
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KEPLER OVERSEAS CORP.
By: DDJ Capital Management, LLC
Pursuant to a Power of Attorney
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #:
Address: Kepler Overseas Corp.
c/o Goldman Sachs (Cayman)
Harbor Center, 2nd Fl.
George Town
Post Offfice Box 896
Grand Cayman Islands
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK OPPORTUNITY OFFSHORE, LP
By: /s/ Lee E. Mikles
-------------------------
Title: Chairman
-------------------------
Tax I.D. #: 95-4596249
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK OPPORTUNITY LP
By: /s/ Lee E. Mikles
-------------------------
Title: Chairman
-------------------------
Tax I.D. #: 95-4596249
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK INTERNATIONAL LTD.
By: /s/ Lee E. Mikles
-------------------------------
Title: Investment Advisor
Tax I.D. #: NONE
---------------------
Address: c/o Kernco Trust
2 Rue Jargonnant
P.O. Box 6432
1211 Geneva 6, Switzerland
Address for Notice:
100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
26,880
------------------------
No. of AUGI Warrants:
23,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$672,235.20
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK CAPITAL, L.P.
By: /s/ Lee E. Mikles
-------------------------------
Title: Chairman
----------------------------
Tax I.D. #: 95-4396374
---------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
15,360
------------------------
No. of AUGI Warrants:
13,440
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$384,134.40
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
GOODLAND INTERNATIONAL INVESTMENT LTD.
By: /s/ Christiane Bosson
-----------------------------
Title: V P
--------------------------
Tax I.D. # NONE
---------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
140,000
------------------------
No. of AUGI Warrants:
122,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$3,501,225.00
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
WEYBURN OVERSEAS LTD.
By: /s/ Christiane Bosson
------------------------------
Title: V P
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
60,000
------------------------
No. of AUGI Warrants:
52,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$1,500,525.00
------------------------
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
Official Signatory of Seller:
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
Official Signatory of Buyer:
PORTER PARTNERS LP
By: Jeffrey H. Porter/ /s/Jeffrey H. Porter
-----------------------------------------
Title: General Managing Partner
----------------------------
Tax I.D. #: 94-3152540
---------------------
Address: 100 Shoreline
Suite 211B
Mill Valley, CA. 94941
Attn: Mr. Jeff Porter
No. of Preferred Shares:
26,000
------------------------
No. of AUGI Warrants:
22,750
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$650,210.00
------------------------
[CONTINUED ON NEXT PAGE]
- Page 17 -Subscription Agt.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
EDJ LIMITED
By: /s/ Patricia N. Sandford
-----------------------------
Title: President
-------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Deltec Panamerica
Trust Co.
Deltec House
Lyford Cay
Box N-3229
Nassau, Bahamas
Attn: Ms. Patricia Sanford
No. of Preferred Shares:
6,000
------------------------
No. of AUGI Warrants:
5,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$150,052.50
------------------------
- Page 17 -Subscription Agt.
<PAGE>
Buyer's Purchaser Representative
(if one is designated by Buyer):
Name:
-------------------------
Title:
-------------------------
Address:
-------------------------
-------------------------
-------------------------
As to PARAGRAPH 3(O) and the last
sentence of SECTION 5 only,
acknowledged and agreed:
Official Signatory of eXodus:
eXodus TECHNOLOGIES, INC.
By:_____________________________
Title:__________________________
- Page 18 -Subscription Agt.
<PAGE>
As to PARAGRAPH 3(O) and the last
sentence of SECTION 5 only,
acknowledged and agreed:
Official Signatory of eXodus:
eXodus TECHNOLOGIES, INC.
By: /s/ Robert M. Rubin
----------------------------
Name: Robert M. Rubin
--------------------------
Title: Chairman
-------------------------
- Page 19 -Subscription Agt.
<PAGE>
AUGI REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of January 3, 1996 by and between American United Global, Inc.,
a Delaware corporation ("AUGI" or the "COMPANY"), and the undersigned (each of
the undersigned other than AUGI is sometimes hereinafter referred to as a
"HOLDER"; the undersigned other than eXodus are sometimes hereinafter
collectively referred to as the "HOLDERS").
Reference is made to those certain Subscription Agreements of even date
herewith by and among AUGI and its subsidiary, eXodus Technologies, Inc.
("EXODUS"), on the one hand, and each of the Holders, on the other hand (each
such Subscription Agreement is sometimes hereinafter referred to as a
"SUBSCRIPTION AGREEMENT"; and all such Subscription Agreements are sometimes
hereinafter referred to collectively as the "SUBSCRIPTION AGREEMENTS").
Pursuant to SECTIONS 3(P) and 3(Q) of each Subscription Agreement, AUGI has
certain obligations with regard to registration of "AUGI CONVERSION COMMON
SHARES" issuable on conversion of the "PREFERRED SHARES" and the "AUGI WARRANT
SHARES" issuable upon exercise of the "AUGI WARRANTS" (as such terms are defined
in the aforesaid Subscription Agreements) for resale by the holders pursuant to
the "SECURITIES ACT" (as such term is hereinafter defined) and applicable State
"blue sky" laws, and to use its best efforts to cause the aforesaid registration
under the Securities Act to be declared effective by the "COMMISSION" (as such
term is hereinafter defined). The AUGI Conversion Common Shares and the AUGI
Warrant Shares are sometimes hereinafter referred to as "REGISTRABLE
SECURITIES". Each undersigned Holder agrees to furnish customary cooperation to
AUGI in the performance of its registration obligations, subject to the
following terms and conditions:
1. DEFINITIONS.
"AFFILIATE" of any specified "Person" (as such term is hereinafter
defined) means any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED, HOWEVER, that beneficial ownership of 10% or
more of the voting securities of a Person shall be deemed to be control.
<PAGE>
"AGREEMENT" has the meaning assigned to that term in the preamble to
this Agreement.
"AUGI" has the meaning assigned to that term in the preamble to this
Agreement.
"AUGI CONVERSION COMMON SHARES" has the meaning assigned to that term by
reference in the preamble to this Agreement.
"AUGI REGISTRATION" has the meaning assigned to that term in SECTION
2(A) of this Agreement.
"AUGI WARRANTS" has the meaning assigned to that term by reference in
the preamble to this Agreement.
"AUGI WARRANT SHARES" has the meaning assigned to that term by reference
in the preamble to this Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the City of New York, Borough of Manhattan are not
required to be open.
"COMMISSION" has the meaning assigned to that term in SECTION 2(C) of
this Agreement.
"COMPANY" has the meaning assigned to that term in the preamble to this
Agreement.
"EXCHANGE ACT" has the meaning assigned to that term in SECTION 2(D) of
this Agreement.
"EXODUS" has the meaning assigned to that term in the preamble to this
Agreement.
"HOLDER" or "HOLDERS" have the meanings assigned to those terms in the
preamble to this Agreement.
"INSPECTORS" has the meaning assigned to such term in SECTION 2(C)(IX)
of this Agreement.
"MAJORITY IN INTEREST" means a majority in interest of the Holders, as
determined by reference to their respective proportions of the aggregate number
of Registrable Securities issued to such Holders pursuant to the terms and
conditions of the Subscription Agreements and still held of record by such
Holders at the time of any such determination.
"PERSON" means any corporation, individual, joint-stock company, limited
liability company, joint venture, partnership, unincorporated association,
governmental regulatory entity, country, state or political subdivision thereof,
- Page 2 -AUGI Reg. Rts Agt.
<PAGE>
trust, municipality or other entity.
"PREFERRED SHARES" has the meaning assigned to that term by reference in
the preamble to this Agreement.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with this Agreement, including without limitation:
(i) all Commission, stock exchange, or National Association of Securities
Dealers, Inc. registration and filings fees, (ii) all fees and expenses incurred
by the Company in connection with compliance with state securities or blue sky
laws (including reasonable fees and disbursements of counsel for any
underwriters in connection with blue sky qualifications of any of the
Registrable Securities), (iii) all expenses of the Company pursuant to this
Agreement in preparing or assisting in preparing, word processing, printing and
distributing the registration statement relating to any of the Registrable
Securities, any underwriting agreements and other documents to effect the
registration of the Registrable Securities pursuant to this Agreement, (iv) all
fees and expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges pursuant to
SECTION 2(C)(VII) hereof, (v) all rating agency fees, if any, (vi) the fees and
disbursements of counsel for the Company and of the Company's independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vii) any
fees and disbursements of any underwriters customarily paid by issuers or
sellers of securities and the reasonable fees and expenses of any special
experts retained by the underwriters in connection with the registration
statement relating to any of the Registrable Securities; BUT "Registration
Expenses does NOT include (i) any underwriting discounts and commissions and
transfer taxes, if any, or (ii) the fees and disbursements of counsel to, and
accountants or other professionals retained by, any Holder.
"REGISTRABLE SECURITIES" has the meaning assigned to that term in the
preamble to this Agreement.
"SECURITIES ACT" has the meaning assigned to that term in SECTION 2 of
this Agreement.
"SHARES" means any securities of the Company and securities convertible
into, exchangeable for, or exercisable to acquire securities of the Company.
"SUBSCRIPTION AGREEMENT" has the meaning assigned to that term in the
preamble to this Agreement.
2. REGISTRATION RIGHTS.
- Page 3 -AUGI Reg. Rts Agt.
<PAGE>
Pursuant to SECTIONS 3(P) and 3(Q) of each Subscription Agreement, AUGI
has certain obligations with regard to registration of AUGI Conversion Common
Shares issuable on conversion of the Preferred Shares and the AUGI Warrant
Shares issuable upon exercise of the AUGI Warrants (as such terms are defined in
the aforesaid Subscription Agreements) for resale by the Holders on a continuous
basis pursuant to Rule 415 pursuant to the Securities Act of 1933, as amended
(the "SECURITIES ACT") and applicable State "blue sky" laws, and to use its best
efforts to cause the aforesaid registration under the Securities Act to be
declared effective by the Commission. Each undersigned Holder shall be entitled
to have such Holder's Registrable Securities included in such registration
statement on the terms and conditions of the aforesaid SECTIONS 3(P) and 3(Q)
provided that such Holder furnishes customary cooperation to AUGI in the
performance of its registration obligations on the following terms and
conditions.
(a) EXPENSES. The Company shall pay all Registration Expenses in
connection with such registration of Registrable Securities pursuant to the
aforesaid SECTIONS 3(P) and 3(Q) (the "AUGI REGISTRATION"). However, each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the AUGI Registration, and the fees and disbursements of
counsel to, and accountants or other professionals, retained by, such Holder.
(b) INCLUSION OF SECURITIES BY THE COMPANY. The Company may include
shares of its securities for its own account in the AUGI Registration.
(c) REGISTRATION PROCEDURES. In connection with the AUGI Registration,
the Company shall use its best efforts to do the following:
(i) Prepare and file with the Securities and Exchange Commission
(the "COMMISSION"), in accordance with the provisions of SECTIONS 3(P) and 3(Q)
of the Subscription Agreements, a registration statement on Form S-3 or, if such
Form is not then available to the Company for this purpose, any other Form for
which Company then qualifies or which counsel for Company shall deem
appropriate, and which Form shall be available for the sale of the Registrable
Securities in accordance with the intended methods of distribution thereof, and
use its best efforts to cause such registration statement to become and remain
effective as provided in SECTIONS 3(P) and 3(Q) of the Subscription Agreements,
PROVIDED that the Company will notify the Holders whose Registrable Securities
are included in such AUGI Registration of any stop order issued or threatened by
the Commission and
- Page 4 -AUGI Reg. Rts Agt.
<PAGE>
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(ii) Prepare and file with the Commission such amendments and
supplements to such AUGI Registration and the prospectus used in connection
therewith as may be necessary to keep such AUGI Registration effective for the
period specified in SECTIONS 3(P) and 3(Q) of the Subscription Agreements or
such shorter period that will terminate when all Registrable Securities covered
by such AUGI Registration statement have been sold (but not before the
expiration of the time periods referred to in Section 4(3) of the Securities Act
and Rule 174, or any successor thereto, if applicable), and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the AUGI Registration during such period in accordance
with the intended methods of disposition by the sellers thereof set forth in the
AUGI Registration.
(iii) Furnish to each Holder and each underwriter, if any, of
Registrable Securities covered by such registration statement such number of
copies of such AUGI Registration, each amendment and supplement thereto (in each
case including all exhibits thereto), and the prospectus included in such AUGI
Registration (including each 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 the Registrable
Securities owned by such Holder.
(iv) Use its best efforts to register or qualify such Registrable
Securities under such other state securities or "blue sky" laws of such
jurisdictions as each Holder including Registrable Securities in such AUGI
Registration, and each underwriter, if any, of Registrable Securities covered by
such AUGI Registration reasonably requests and do any and all other acts and
things that may be reasonably necessary or advisable to enable each such Holder
and each underwriter, if any, to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; PROVIDED that
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
clause (iv), (B) subject itself to taxation or regulation of its business in any
such jurisdiction, or (C) consent to general service of process in any such
jurisdiction.
(v) Use its best efforts to cause the Registrable Securities
covered by such AUGI Registration to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable each such Holder to
- Page 5 -AUGI Reg. Rts Agt.
<PAGE>
consummate the disposition of such Registrable Securities.
(vi) Immediately notify each Holder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event that comes to the Company's attention if as a result of
such event the prospectus included in the AUGI Registration contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Company will promptly prepare and furnish to each such Holder a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
(vii) Use its best efforts to cause all such Registrable
Securities to be listed on a national securities exchange in the United States
or NASDAQ and on each securities exchange on which similar securities issued by
the Company may then be listed, and enter into such customary agreements
including a listing application and indemnification agreement in customary form,
and to provide a transfer agent and registrar for such Registrable Securities
covered by the AUGI Registration no later than the effective date of the AUGI
Registration.
(viii) Enter into such customary agreements (including an
underwriting agreement or qualified independent underwriting agreement, in each
case, in customary form) and take all such other actions as the Majority in
Interest whose Registrable Securities are included in the AUGI Registration or
the underwriters retained by such Majority in Interest, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities, including customary representations, warranties, indemnities and
agreements.
(ix) Make available for inspection, by each such Holder, any
underwriter participating in any disposition pursuant to the AUGI Registration,
and the attorney, accountant or other agent retained by the Majority in Interest
or any such underwriter (collectively, the "INSPECTORS"), all financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries, if any, as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees, and those of the Company's affiliates, if any, to
supply all information and respond to all inquiries reasonably requested by any
such Inspector in connection with the AUGI Registration; PROVIDED, that all such
- Page 6 -AUGI Reg. Rts Agt.
<PAGE>
inspection, due diligence, and responses shall be undertaken during normal
business hours of the Company, without material disruption of the conduct of the
Company's business, and subject to customary confidentiality agreements.
(x) Use its best efforts to obtain a "cold comfort" letter from
the Company's appointed auditors in customary form and covering such matters of
the type customarily covered by "cold comfort" letters as the Majority in
Interest reasonably requests.
(xi) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to each Holder whose
Registrable Securities are included in the AUGI Registration, as soon as
reasonably practicable, an earnings statement covering a period of at least
twelve months beginning after the effective date of the registration statement
(as the term "effective date" is defined in Rule 158(c) under the Securities
Act) which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder.
It shall be a condition precedent to the obligation of the Company to
take any action with respect to any Registrable Securities of any Holder that
such Holder thereof shall furnish to the Company such information regarding such
Holder, the Registrable Securities and any other Shares held by such Holder and
the intended method of disposition of the Registrable Securities held by such
Holder as the Company shall reasonably request and as shall be required in
connection with the action taken by the Company; and, furthermore, that each
such Holder shall utilize such Holder's best efforts to facilitate the
completion and effectiveness of the AUGI Registration including, without
limitation, furnishing customary information (for inclusion in the AUGI
Registration and for due diligence purposes in connection therewith),
undertakings, and agreements in connection therewith and not materially
inconsistent with the other provisions of this Agreement.
Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in SECTION 2(C)(VI) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by SECTION 2(C)(VI) hereof, and, if so directed by the
Company such Holder will deliver to the Company (at the Company's expense) all
copies (including, without limitation, any and all drafts), other than permanent
file copies, then in such Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event that the Company
- Page 7 -AUGI Reg. Rts Agt.
<PAGE>
shall give any such notice, the period mentioned in SECTION 2(C)(II) hereof
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to SECTION 2(C)(VI) hereof to and
including the date when the Holder shall have received the copies of the
supplemented or amended prospectus contemplated by SECTION 2(C)(VI) hereof.
(d) INDEMNIFICATION.
(i) INDEMNIFICATION BY COMPANY. In connection with the AUGI
Registration pursuant to this Agreement and SECTIONS 3(P) and 3(Q) of the
Subscription Agreements, the Company will indemnify and hold harmless, to the
full extent permitted by law, each Holder whose Registrable Securities are
included in the AUGI Registration, its directors and officers, general partners,
limited partners and managing directors, each other Person who participates as
an underwriter in the offering or sale of such securities and each other Person,
if any, who controls, is controlled by or is under common control with any such
Holder or any such underwriter within the meaning of the Securities Act (and
directors, officers, controlling Persons, partners and managing directors,
counsel, and accountants of any of the foregoing) against any and all losses,
claims, damages or liabilities, joint or several, and expenses (including (a)
reasonable fees and expenses of attorneys incurred by them in connection with
investigating or defending such loss, claim, liability, action or proceeding and
(b) any amounts paid in any settlement effected with the Company's consent,
which consent will not be unreasonably withheld) to which any such Holder, any
such director or officer or general or limited partner or managing director or
any such underwriter or controlling Person, counsel or accountants may become
subject under the Securities Act, United States state securities "blue sky"
laws, common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) or expenses arise out
of or are based upon (A) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in the AUGI Registration
under which such securities were registered under the Securities Act, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, (B) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (C) any violation or alleged violation by the Company
of any United States federal, state or common law rule or regulation applicable
to Company and relating to action required of or inaction by Company in
connection with the AUGI Registration; PROVIDED, HOWEVER, that Company shall not
be liable in any such case to the extent that any such loss, claim, damage,
- Page 8 -AUGI Reg. Rts Agt.
<PAGE>
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such AUGI Registration or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by any Holder in its capacity as a shareholder in the
Company or any such director, officer, general or limited partner, managing
director, underwriter or controlling Person or their respective counsel or
accountants specifically stating that it is for use in the preparation thereof;
and, PROVIDED, FURTHER, that the Company shall not be liable to any Holder, any
Person who participates as an underwriter in the offering or sale of Registrable
Securities, if any, or any other Person, if any, who controls such underwriter
within the meaning of the Securities Act, or their respective counsel or
accountants pursuant to this SECTION 2(D)(I) with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented as the case may be, to the extent that any such loss, claim, damage
or liability of such Holder, underwriter or controlling or other Person results
from the fact that such underwriter sold Registrable Securities to a Person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus or of the final prospectus as then
amended or supplemented, whichever is most recent, if the Company has previously
furnished copies thereof to such underwriter and such final prospectus, as then
amended or supplemented, had corrected any such misstatement or omission. The
indemnity provided for herein shall remain in full force and effect regardless
of any investigation made by or on behalf of any Holder or any such director,
officer, general partner, limited partner, managing director, underwriter or
controlling Person or their respective counsel or accountants and shall survive
the transfer of such securities by such Holder.
(ii) INDEMNIFICATION BY HOLDER AND UNDERWRITERS. The Company
will require, as a condition to including any Holder's Registrable Securities in
the AUGI Registration, that the Company shall have received an undertaking
reasonably satisfactory to it from each Holder or any underwriter of Registrable
Securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in PARAGRAPH (I) above) the Company and its directors,
officers, controlling Persons and all other prospective sellers and their
respective directors, officers, general and limited partners, managing
directors, and their respective controlling Persons and the counsel and
accountants of each of the foregoing with respect to any statement or alleged
statement in or omission or alleged omission from such AUGI
- Page 9 -AUGI Reg. Rts Agt.
<PAGE>
Registration, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement, if such statement or alleged statement or omission
or alleged omission was made in reliance upon and in conformity with written
information relating to such Holder or underwriter furnished to the Company or
its representatives through an instrument duly executed by or on behalf of any
such Holder or any underwriter specifically stating that it is for use in the
preparation of such AUGI Registration, preliminary, final or summary prospectus
or amendment or supplement, or a document incorporated by reference into any of
the foregoing. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Company or any Holder, any
underwriters or any of their respective directors, officers, general or limited
partners, managing directors or controlling Persons or their respective counsel
or accountants and shall survive the transfer of such securities by any Holder,
PROVIDED, HOWEVER, that no Holder shall be liable in the aggregate for any
amounts exceeding the product of the sale price per Registrable Security and the
number of Registrable Securities being sold pursuant to such AUGI Registration
or prospectus by such Holder.
(iii) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this SECTION 2(D), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, promptly give
written notice to the indemnifying party of the commencement of such action,
PROVIDED, HOWEVER, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this SECTION 2(D), except to the extent that
the indemnifying party is actually materially prejudiced by such failure to give
notice. In case any such action is brought against an indemnified party, unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified party and indemnifying parties may exist in respect of such
claim, the indemnifying party will be entitled to participate in and, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties arises in
respect of such claim after the assumption
- Page 10 -AUGI Reg. Rts Agt.
<PAGE>
of the defense thereof, and the indemnifying party will not be subject to any
liability for any settlement made without its consent (which consent shall not
be unreasonably withheld). No indemnifying party will consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel in any single jurisdiction for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels as may be reasonably
necessary. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
(iv) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subsections of this SECTION 2(D) (with appropriate
modifications) shall be given by the Company and each Holder whose Registrable
Securities are included pursuant to this Agreement in the AUGI Registration
under the Securities Act, to the full extent permitted by applicable law, with
respect to any concurrent required registration or other qualification of
securities under any United States federal or state law or regulation or
governmental authority other than the Securities Act.
(v) CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this SECTION 2(D) is for any reason held to be unenforceable although applicable
in accordance with its terms, the Company, and each Holder and the underwriters
of Registrable Securities included in the applicable registration shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the Company,
each such Holder and the underwriters, in such proportions that the underwriters
are responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the prospectus bears to the
public offering price appearing thereon and the Company and each such Holder are
responsible for the balance; PROVIDED, HOWEVER, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
- Page 11 -AUGI Reg. Rts Agt.
<PAGE>
Person who was not guilty of such fraudulent misrepresentation. As between the
Company and each Holder, such parties shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect
(A) the relative benefits received by the Company, on the one hand, and each
such Holder on the other hand, from the offering of the Registrable Securities
and any other securities included in such offering, and (B) the relative fault
of the Company, on the one hand, and each such Holder on the other, with respect
to the statements or omissions that resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or any such Holder, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Holders
agree that it would not be just and equitable if contribution pursuant to this
SECTION 2(D) were to be determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. Notwithstanding anything to the contrary contained herein,
the Company and the Holders agree that any contribution required to be made by
any Holder pursuant to this SECTION 2(D) shall not exceed the net proceeds from
the offering of Registrable Securities (before deducting expenses) received by
the applicable Holder with respect to such offering. For purposes of this
SECTION 2(D), each Person, if any, who controls any Holder or an underwriter
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such Holder or such underwriter, and each director of
the Company, each officer of the Company who signed the AUGI Registration, and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company.
(d) RULE 144. The Company agrees that it will file in a timely manner
all reports required to be filed by it pursuant to the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), and, if at any time Company is not
required to file such reports, it will make available to the public, to the
extent required to permit the sale of Registrable Shares by each Holder pursuant
to Rule 144, current information about itself and its activities as contemplated
by Rule 144 under the Securities Act, as such Rule may be amended from time to
time. Notwithstanding the foregoing, the Company may deregister any class of
its equity securities under Section 12 of the Exchange Act or suspend its
- Page 12 -AUGI Reg. Rts Agt.
<PAGE>
duty to file reports with respect to any class of its securities pursuant to
Section 15(d) of the Exchange Act if it is then permitted to do so pursuant to
the Exchange Act and the rules and regulations thereunder.
3. MISCELLANEOUS.
(a) REMEDIES. Each party to this Agreement, in addition to being
entitled to exercise all rights provided herein, in the applicable Subscription
Agreement or granted by law, including recovery of liquidated or other damages,
will be entitled to seek specific performance of its rights under this
Agreement.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is materially inconsistent with the rights granted to any Holder in this
Agreement or otherwise materially conflicts with the provisions hereof. The
rights granted to each Holder hereunder do not materially conflict with and are
not materially inconsistent with the rights granted to the holders of Company's
securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the party against which the same
is sought to be enforced has obtained the written consent of each of the other
parties hereto.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to any Holder, at the address set forth beneath such
Holder's name on the signature pages hereof;
- Page 13 -AUGI Reg. Rts Agt.
<PAGE>
(ii) if to Company, c/o:
American United Global, Inc.
11130 NE 33rd Place, Suite 250
Bellevue, Washington 98004
Attention: Robert M. Rubin
President
Telecopy No.: 206-803-5438
with a copy to:
Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel
153 East 53rd Street
New York, New York 10022
Attention: Stephen A. Weiss, Esq.
Andrew J. Cosentino, Esq.
Telecopy No.: 212-223-7161
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the U.S. Mail, First Class postage prepaid, if
mailed; when answered back, if telexed; when receipt properly acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
including without limitation and without the need for an express assignment,
subsequent holders of Registrable Securities; PROVIDED, HOWEVER, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a holder unless and to the extent such successor or assign acquired
Registrable Securities from a Holder other than through the AUGI Registration.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Facsimiles of counterpart
pages shall be deemed to be originals.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
- Page 14 -AUGI Reg. Rts Agt.
<PAGE>
(h) 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 LAW RULES THEREOF.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) ENTIRE AGREEMENT. This Agreement together with the Subscription
Agreements (and the exhibits thereto) is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Robert M. Rubin
-------------------------------------
Name: Robert M. Rubin
Title: President
- Page 15 -AUGI Reg. Rts Agt.
<PAGE>
THE HOLDERS:
GOODLAND INTERNATIONAL INVESTMENT LTD.
By: /s/ Christiane Bosson
-----------------------------
Title: VP
--------------------------
Tax I.D. # NONE
---------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
140,000
------------------------
No. of AUGI Warrants:
122,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$3,501,225.00
------------------------
- Page 16 -AUGI Reg. Rts Agt.
<PAGE>
WEYBURN OVERSEAS LTD.
By: /s/ Christiane Bosson
-----------------------------
Title: VP
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
60,000
------------------------
No. of AUGI Warrants:
52,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$1,500,525.00
------------------------
- Page 17 -AUGI Reg. Rts Agt.
<PAGE>
PORTER PARTNERS LP
By: /s/
-----------------------------
Title: General Managing Partner
--------------------------
Tax I.D. #: 94-3152540
-------------------
Address: 100 Shoreline
Suite 211B
Mill Valley, CA. 94941
Attn: Mr. Jeff Porter
No. of Preferred Shares:
26,000
------------------------
No. of AUGI Warrants:
22,750
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$650,210.00
------------------------
- Page 18 -AUGI Reg. Rts Agt.
<PAGE>
EDJ LIMITED
By: /s/ Patricia N. Sandford
-----------------------------
Title: President
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Deltec Panamerica
Trust Co.
Deltec House
Lyford Cay
Box N-3229
Nassau, Bahamas
Attn: Ms. Patricia Sandford
No. of Preferred Shares:
6,000
------------------------
No. of AUGI Warrants:
5,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$150,052.50
------------------------
- Page 19 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK CAPITAL, L.P.
By: /s/ Lee E. Mikles
-----------------------------
Title: Chairman/G.P.
--------------------------
Tax I.D. #: 95-4396374
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
15,360
------------------------
No. of AUGI Warrants:
13,440
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$384,134.40
------------------------
- Page 20 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK INTERNATIONAL LTD.
By: /s/ Lee E. Mikles
-----------------------------
Title: Inv. Advisor
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Kernco Trust
2 Rue Jargonnant
P.O. Box 6432
1211 Geneva 6, Switzerland
Address for Notice:
100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
26,880
------------------------
No. of AUGI Warrants:
23,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$672,235.20
------------------------
- Page 21 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK OPPORTUNITY LP
By: /s/ Lee E. Mikles
-----------------------------
Title: Chairman/G.P.
--------------------------
Tax I.D. #: 95-4596249
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 22 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK OPPORTUNITY OFFSHORE LIMITED
By: /s/ Lee E. Mikles
-----------------------------
Title: Inv. Advisor
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Citco Fund Services
Corporate Centre
West Bay Road
P.O.B. 31106, SMB
Grand Cayman, Cayman Islands BWI
Attn: Mr. Patrick Agemian
No. of Preferred Shares:
1,920
------------------------
No. of AUGI Warrants:
1,680
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$48,016.80
------------------------
- Page 23 -AUGI Reg. Rts Agt.
<PAGE>
THE GALILEO FUND, L.P.
By: /s/ DDJ Galileo, LLC, its General
Partner
-----------------------------
Title: Member
--------------------------
Tax I.D. #: 04-3258283
-------------------
Address: 141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC DDJ Galileo Fund, L.P.
No. of Preferred Shares:
112,800
------------------------
No. of AUGI Warrants:
98,700
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$2,820,987.00
------------------------
- Page 24 -AUGI Reg. Rts Agt.
<PAGE>
KEPLER OVERSEAS CORP.
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Kepler Overseas Corp.
c/o Goldman Sachs (Cayman)
Harbor Center, 2nd Fl.
George Town
Post Offfice Box 896
Grand Cayman Islands
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC Kepler Overseas Corp.
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 25 -AUGI Reg. Rts Agt.
<PAGE>
CROCODILE I, LLC
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Crocodile I, LLC
c/o DDJ Capital Management, LLC
141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC Crocodile I, LLC
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 26 -AUGI Reg. Rts Agt.
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of January 3, 1996 by and between eXodus Technologies, Inc., a
Washington corporation (hereinafter referred to as "EXODUS" or the "COMPANY")
whose controlling shareholder is American United Global, Inc., a Delaware
corporation ("AUGI"), and the undersigned (each of the undersigned other than
eXodus is sometimes hereinafter referred to as a "HOLDER"; the undersigned other
than eXodus are sometimes hereinafter collectively referred to as the
"HOLDERS").
Reference is made to those certain Subscription Agreements of even date
herewith by and among AUGI and the Company, on the one hand, and each of the
Holders, on the other hand (each such Subscription Agreement is sometimes
hereinafter referred to as a "SUBSCRIPTION AGREEMENT"; and all such Subscription
Agreements are sometimes hereinafter referred to collectively as the
"SUBSCRIPTION AGREEMENTS"). Pursuant to SECTION 3(O)(B) of each Subscription
Agreement, the Holder party thereto shall have the right to acquire from the
Company a certain number of common stock purchase warrants (such warrants, as
more fully described in said SECTION 3(O)(B) of the Subscription Agreement, are
sometimes hereinafter referred to as the "EXODUS WARRANTS") upon the occurrence
of an "EXODUS IPO", as such term is hereinafter defined. Each eXodus Warrant,
if so issued, will entitle the holder thereof to acquire one share (each such
share, an "EXODUS WARRANT SHARE") of the common stock of eXodus (the "EXODUS
COMMON STOCK") upon the terms and conditions of such eXodus Warrant. The term
"EXODUS IPO" shall be defined as the time at which eXodus shall consummate an
initial public offering of eXodus Common Stock, alone or in combination with
other eXodus securities, pursuant to a registration statement filed by eXodus
pursuant to the "SECURITIES ACT" (as such term is defined in SECTION 2 of this
Agreement) and declared effective by the "COMMISSION" (as such term is defined
in SECTION 2(D) of this Agreement). eXodus agreed, pursuant to the terms and
conditions of the Subscription Agreements, that, in the event that the eXodus
Warrants are exercised to acquire eXodus Warrant Shares (such eXodus Warrant
Shares being sometimes hereinafter referred to as "REGISTRABLE SECURITIES"), the
holders of such Registrable Securities would have certain registration rights
pursuant to an agreement among the parties hereto.
The parties hereto are entering into this Registration Rights Agreement
in order to define the registration rights and obligations of the parties hereto
in respect of the Registrable Securities and to induce the Holders to purchase
the Registrable Securities and the Company to sell the same to the Holders
pursuant to their respective Subscription Agreements. Notwith-
<PAGE>
standing anything to the contrary contained in this Agreement, this Agreement
shall not create any obligation on the part of eXodus or AUGI to issue or sell
or cause eXodus to issue or sell the eXodus Warrants or the eXodus Warrant
Shares to any Holder or to any person or entity, and the Subscription Agreements
shall exclusively govern their obligations, and the Holders' rights, in that
regard. Furthermore, notwithstanding anything to the contrary contained herein,
no Holder shall have any rights to demand or cause the registration of any
Registrable Securities or otherwise exercise any rights under this Agreement
unless and until eXodus Warrants are issued to such Holder pursuant to the
Subscription Agreement entered into by that Holder and such Holder acquires
eXodus Warrant Shares by exercising such eXodus Warrants in accordance with the
terms and conditions thereof.
The parties hereby agree as follows:
1. DEFINITIONS.
"AFFILIATE" of any specified "Person" (as such term is hereinafter
defined) means any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED, HOWEVER, that beneficial ownership of 10% or
more of the voting securities of a Person shall be deemed to be control.
"AGREEMENT" has the meaning assigned to that term in the preamble to
this Agreement.
"AUGI" has the meaning assigned to that term in the preamble to this
Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the City of New York, Borough of Manhattan are not
required to be open.
"COMMISSION" has the meaning assigned to that term in SECTION 2(D) of
this Agreement.
"COMPANY" has the meaning assigned to that term in the preamble to this
Agreement.
- Page 2 - Reg. Rights Agt.
<PAGE>
"DEMAND REGISTRATION" has the meaning assigned to that term in SECTION
2(B)(I) of this Agreement.
"DEMAND REGISTRATION RIGHTS COMMENCEMENT DATE" has the meaning assigned
to that term in SECTION 2(B)(I) of this Agreement.
"EXCHANGE ACT" has the meaning assigned to that term in SECTION 2(F) of
this Agreement.
"EXCLUDED REGISTRATIONS" shall have the meaning assigned to that term in
SECTION 2(A) of this Agreement.
"EXODUS" has the meaning assigned to that term in the preamble to this
Agreement.
"EXODUS COMMON STOCK" has the meaning assigned to that term in the
preamble to this Agreement.
"EXODUS IPO" has the meaning assigned to that term in the preamble to
this Agreement.
"EXODUS WARRANT SHARE" has the meaning assigned to that term in the
preamble to this Agreement.
"EXODUS WARRANTS" has the meaning assigned to that term in the preamble
to this Agreement.
"HOLDER" or "HOLDERS" have the meanings assigned to those terms in the
preamble to this Agreement.
"INCIDENTAL REGISTRATION" has the meaning assigned to that term in
SECTION 2(A)(I) of this Agreement.
"INSPECTORS" has the meaning assigned to that term in SECTION 2(D) of
this Agreement.
"MAJORITY IN INTEREST" has the meaning assigned to that term in SECTION
2(B)(1) of this Agreement.
"PERSON" means any corporation, individual, joint-stock company, limited
liability company, joint venture, partnership, unincorporated association,
governmental regulatory entity, country, state or political subdivision thereof,
trust, municipality or other entity.
"PRIORITY SECURITIES" has the meaning assigned to that term in SECTION
2(A) of this Agreement.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with this Agreement, including without limitation:
(i) all Commission, stock
- Page 3 - Reg. Rights Agt.
<PAGE>
exchange, or National Association of Securities Dealers, Inc. registration and
filings fees, (ii) all fees and expenses incurred by the Company in connection
with compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any underwriters in connection with blue
sky qualifications of any of the Registrable Securities), (iii) all expenses of
the Company pursuant to this Agreement in preparing or assisting in preparing,
word processing, printing and distributing the registration statement relating
to any of the Registrable Securities, any underwriting agreements and other
documents to effect the registration of the Registrable Securities pursuant to
this Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities exchange
or exchanges pursuant to SECTION 2(D)(VII) hereof, (v) all rating agency fees,
if any, (vi) the fees and disbursements of counsel for the Company and of the
Company's independent public accountants, including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance, (vii) any fees and disbursements of any underwriters customarily
paid by issuers or sellers of securities and the reasonable fees and expenses of
any special experts retained by the underwriters in connection with the
registration statement relating to any of the Registrable Securities; BUT
"Registration Expenses does NOT include (i) any underwriting discounts and
commissions and transfer taxes, if any, or (ii) the fees and disbursements of
counsel to, and accountants or other professionals retained by, any Holder.
"REGISTRABLE SECURITIES" has the meaning assigned to that term in the
preamble to this Agreement.
"SECURITIES ACT" has the meaning assigned to that term in SECTION 2 of
this Agreement.
"SHARES" has the meaning assigned to that term in SECTION 2(A).
"SUBSCRIPTION AGREEMENT" has the meaning assigned to that term in the
preamble to this Agreement.
2. REGISTRATION RIGHTS.
Commencing upon date upon which the registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), covering any eXodus
IPO is declared effective by the Commission and provided that such eXodus IPO
shall be consummated, each Holder shall have the right to have such Holder's
Registrable Securities registered under the Securities Act and applicable United
States state securities laws in accordance with the following provisions.
- Page 4 - Reg. Rights Agt.
<PAGE>
(a) INCIDENTAL REGISTRATION.
(i) If the Company at any time proposes to register on a
registration statement on Form S-1, Form S-2, or S-3 (or an equivalent
registration form then in effect) any shares of eXodus Common Stock ("SHARES")
or any options, warrants or other rights to acquire, or securities convertible
into or exchangeable for Shares (the "PRIORITY SECURITIES") under the Securities
Act (PROVIDED, that the provisions of this Section 2 shall NOT apply to any
registration (A) relating to securities issuable in connection with the eXodus
IPO, (B) relating to shares issuable upon exercise of employee share options or
in connection with any employee benefit or similar plan of the Company, or
(C) in connection with an acquisition by the Company of another company or other
business entity or its assets (collectively, "EXCLUDED REGISTRATIONS")) in a
manner which would permit registration of Registrable Securities for sale to the
public under the Securities Act, whether or not for sale for the Company's own
account, it shall each such time (other than with regard to any Excluded
Registration) give prompt written notice to each Holder of its intention to do
so and of the Holders' rights under this SECTION 2(A), at least 30 calendar days
prior to the anticipated filing date of the registration statement relating to
such registration. Such notice shall offer each Holder the opportunity to
include in such registration statement (other than an Excluded Registration)
such number of Registrable Securities as such Holder may request. Upon the
written request of any Holder made within 20 calendar days after the receipt of
Company's notice (which request shall specify the number of Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by any Holder (any such registration
on behalf of any Holder, other than an Excluded Registration, is sometimes
hereinafter referred to as an "INCIDENTAL REGISTRATION"); PROVIDED, HOWEVER,
that (A) if such registration involves an underwritten offering, each Holder
requesting the inclusion of such Holder's Registrable Securities in such
registration statement must sell such Holder's Registrable Securities to the
underwriters selected by Company on the same terms and conditions as apply to
the Company, and (B) if, at any time after giving written notice pursuant to
this SECTION 2(A)(I) of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
securities, the Company shall give written notice to the Holder and shall
thereupon be relieved of its obligation to register any Registrable Securities
in connection with such registration. If a registration pursuant to this
SECTION 2(A)
- Page 5 - Reg. Rights Agt.
<PAGE>
involves an underwritten public offering, the Holder may elect, in writing not
less than five (5) days prior to the effective date of the registration
statement filed in connection with such registration, not to register such
Registrable Securities in connection with such registration. The Company shall
pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this SECTION 2(A). However, the
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of its Registrable Securities
pursuant to a registration statement effected pursuant to this SECTION 2(A), and
the fees and disbursements of counsel to, and accountants or other
professionals, retained by, such Holder. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities upon the
earliest to occur of the following: (i) a registration statement with respect
to the sale of such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement; (ii) when such securities may be sold under Rule 144 (or
any successor provision) under the Securities Act; (iii) such securities shall
have been otherwise transferred and new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company;
(iv) such securities shall have ceased to be outstanding; or (v) the Holder in
question shall have had the opportunity to have all of such Holder's Registrable
Securities sold pursuant to three (3) or more such Incidental Registrations
(singly or in the aggregate), the effective dates of at least two of such
registration statements being not less than six (6) months apart.
Notwithstanding anything to the contrary contained in this SECTION 2(A)(I), the
Company's obligation to give notice to a Holder in respect of any proposed
registration shall cease as to such Holder when such Holder no longer owns
securities which are Registrable Securities within the meaning of this
Agreement.
(ii) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration
pursuant to this SECTION 2(A) involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its good faith view, the
number of equity securities (including all Registrable Securities) that the
Company, the Holders, and any other Persons intend to include in such
registration exceeds the largest number of such securities that can be sold
without having an adverse effect on such offering, including the price at which
such Registrable Securities can be sold, the Company will include in such
registration (A) first, all the Priority Securities to be sold for the Company's
own account; (B) second, all other securities sought to be sold for the
Company's own account; and (C) third, to the extent that the number of Priority
Securities and other securities referred to in (A) and (B) is
- Page 6 - Reg. Rights Agt.
<PAGE>
less than the number of securities that the underwriter has advised the Company
can be sold in such offering without having the adverse effect referred to
above, as many Registrable Securities as are requested to be included in such
registration by the Holder pursuant to SECTION 2(A)(I) hereof on a pro rata
basis (calculated by reference to the proportionate amount of securities sought
to be included in the registration) with all other Persons contractually
entitled to have securities included in such registration.
(iii) If the Company at any time proposes to effect a public
offering in a jurisdiction other than the United States of any of its Shares or
any options, warrants or other rights to acquire, or securities convertible into
or exchangeable for Shares (other than a public offering, (A) relating to shares
issuable upon exercise of employee share options or in connection with any
employee benefit or similar plan of the Company or (B) in connection with an
acquisition by the Company of another company or other business entity or its
assets) the Company and the Holders will have the rights and be subject to the
obligations agreed in this SECTION 2(A) to the extent and where applicable.
(b) DEMAND REGISTRATION.
(i) Commencing on or after the date which shall be twelve (12)
months after the date on which the Commission declares the Company's
registration statement covering the shares offered in the eXodus IPO to be
effective (the "DEMAND REGISTRATION RIGHTS COMMENCEMENT DATE"), a majority in
interest of the Holders, as determined by reference to their respective
proportions of the aggregate number of Registrable Securities issued to such
Holders pursuant to the terms and conditions of the Subscription Agreements and
still held of record by such Holders at the time of any such determination
(hereinafter, a "MAJORITY IN INTEREST"), may request on one and ONLY one
occasion (except as hereinafter set forth) that the Company file a registration
statement under the Securities Act, on a registration statement form then
available to the Company and the Holders for such purpose, for the sale by the
Holders of not less than $500,000 in value (based upon the closing price (or, if
the closing price is so reported on the principal market for such securities,
the closing bid price) of a share of the eXodus Common Stock as reported on the
principal market for such securities on the date on which such demand is
received by the Company) of the Registrable Securities issued to such Holders
pursuant to such Subscription Agreements and still held of record by such
Holders as of such date. Each request for such a registration (hereinafter
referred to as a "DEMAND REGISTRATION") shall specify the approximate number of
shares of Registrable Securities requested to be registered and the anticipated
per share price
- Page 7 - Reg. Rights Agt.
<PAGE>
range for such offering. Within ten (10) days after receipt of any such
request, the Company will give written notice of such requested registration to
all other Holders, and the other Holders may request in writing received by the
Company within five (5) days thereafter that Registrable Securities issued to
such other Holders pursuant to the Subscription Agreements and still held of
record by such other Holders be included in the Demand Registration, such
request to specify the approximate number of shares of Registrable Securities
requested to be so registered. Subject to the approval of the holders of a
Majority in Interest of the Holders, which consent shall not be unreasonably
withheld, the Company may select the investment banker(s) and manager(s) to
administer the offering. In the event that the Company attempts to cause a
Demand Registration to become effective after a demand is made pursuant to this
SECTION 2(B), but such Demand Registration is not declared effective pursuant to
the rules and regulations of the Commission within six (6) months after the
demand therefor is received by the Company (other than due to the failure of any
Holder seeking to have such Holder's shares included in such registration to
perform such Holder's obligations), then unless and until said Demand
Registration so becomes effective, the Holders shall still be deemed to have the
right hereunder to request one (1) Demand Registration pursuant to this SECTION
2(B). Notwithstanding anything to the contrary in this Agreement, the Holders
may not require any Demand Registration within six (6) months of any opportunity
to participate in any Incidental Registration to the extent of Registrable
Securities having a value of at least $250,000 (PROVIDED that Registrable
Securities not included in any Incidental Registration due to an underwriter
determination in accordance with SECTION 2(A)(II) of this Agreement shall not be
counted as part of the total of $250,000 in Registrable Securities), measured
(in the same fashion as above in this SECTION 2(B)(I)) as of the date of request
by any Holder for inclusion in such Incidental Registration.
(ii) The Company may include shares of its securities for its own
account in any Registration Statement pursuant to this SECTION 2(B).
(c) HOLDBACK AGREEMENTS.
(i) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, each Holder participating
therein agrees not to effect any sale or distribution, including any private
placement or any sale pursuant to Rule 144A (or any successor provision) or
otherwise or any sale pursuant to Rule 144 (or any successor provision), under
the Securities Act, of any Registrable Securities, other than by pro-rata
distribution to its share-
- Page 8 - Reg. Rights Agt.
<PAGE>
holders, partners or other beneficial holders, and not to effect any such sale
or distribution of any other equity security of Company or of any security
convertible into or exchangeable or exercisable for any equity security of
Company (in each case, other than as part of such underwritten public offering)
during the ten calendar days prior to, and during the 180 calendar day period
(or such lesser period as may be agreed upon between such holders of Registrable
Securities and the managing underwriter of such offering PROVIDED, that in no
event shall such period be longer than the period applicable to the executive
officers of eXodus or any holder of five percent (5%) or more of the outstanding
shares of eXodus Common Stock) that begins on the effective date of such
registration statement (except as part of such registration), without the
consent of the managing underwriter of such offering; PROVIDED, HOWEVER, that
such Holder has received written notice of such registration at least two
Business Days prior to the anticipated beginning of the ten calendar day period
referred to above.
(ii) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Company agrees (A) not to
effect any public sale or distribution of any of its equity securities or of any
security convertible into or exchangeable or exercisable for any equity security
of Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by Company or any Affiliate of
Company or the acquisition by Company or an Affiliate of Company of the shares
or substantially all the assets of any other Person or in connection with an
employee stock ownership or other benefit plan or an Excluded Registration)
during the ten days prior to, and during the 180-day period (or such lesser
period as may be agreed upon between such holders of Registrable Securities and
the managing underwriter of such offering (PROVIDED, that in no event shall such
period be longer than the period applicable to the executive officers of eXodus
or any holder of five percent (5%) or more of the outstanding shares of eXodus
Common Stock) which begins on, the effective date of such registration statement
(except as part of such registration), and (B) that any agreement entered into
after the date hereof pursuant to which Company issues or agrees to issue any
privately placed equity securities shall contain a provision under which the
holders of such securities agree not to effect any public sale or distribution
of any such securities during the period and in the manner referred to in the
foregoing clause (A), including a private placement pursuant to Rule 144A under
the Securities Act (or any successor provision) or otherwise and any sale
pursuant to Rule 144 under the Securities Act (except as part of such
registration, if permitted).
- Page 9 - Reg. Rights Agt.
<PAGE>
(d) REGISTRATION PROCEDURES. In connection with any offering of
Registrable Securities registered pursuant to this SECTION 2, the Company shall
use its best efforts to do the following:
(i) Prepare and file with the Securities and Exchange Commission
(the "COMMISSION") within sixty (60) calendar days after receipt of a request
for registration, a registration statement on any form for which Company then
qualifies or which counsel for Company shall deem appropriate, and which form
shall be available for the sale of the Registrable Securities in accordance with
the intended methods of distribution thereof, and use its best efforts to cause
such registration statement to become and remain effective as provided herein,
PROVIDED that before filing with the Commission a registration statement or
prospectus or any amendments or supplements thereto, Company will (A) furnish to
one counsel selected by the Majority in Interest copies of all such documents
proposed to be filed for said counsel's review and comment, and (B) notify the
Holders whose Registrable Securities are included in such Demand Registration or
Incidental Registration of any stop order issued or threatened by the Commission
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than one hundred eighty (180) days or such shorter period
that will terminate when all Registrable Securities covered by such registration
statement have been sold (but not before the expiration of the time periods
referred to in Section 4(3) of the Securities Act and Rule 174, or any successor
thereto, if applicable), and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement.
(iii) Furnish to each Holder and each underwriter, if any, of
Registrable Securities covered by such registration statement such number of
copies of such registration statement, each amendment and supplement thereto (in
each case including all exhibits thereto), and the prospectus included in such
registration statement (including each 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 the
Registrable Securities owned by Holder.
- Page 10 - Reg. Rights Agt.
<PAGE>
(iv) Use its best efforts to register or qualify such Registrable
Securities under such other state securities or "blue sky" laws of such
jurisdictions as each Holder including Registrable Securities in such
registration, and each underwriter, if any, of Registrable Securities covered by
such registration statement reasonably requests and do any and all other acts
and things that may be reasonably necessary or advisable to enable each such
Holder and each underwriter, if any, to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; PROVIDED that
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
clause (iv), (B) subject itself to taxation or regulation of its business in any
such jurisdiction, or (C) consent to general service of process in any such
jurisdiction.
(v) Use its best efforts to cause the Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of Company to enable each such Holder to consummate the
disposition of such Registrable Securities.
(vi) Immediately notify Holder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event that comes to Company's attention if as a result of such
event the prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Company will promptly prepare and furnish to each such Holder a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
(vii) Use its best efforts to cause all such Registrable
Securities to be listed on a national securities exchange in the United States
or NASDAQ and on each securities exchange on which similar securities issued by
Company may then be listed, and enter into such customary agreements including a
listing application and indemnification agreement in customary form, and to
provide a transfer agent and registrar for such Registrable Securities covered
by such registration statement no later than the effective date of such
registration statement.
- Page 11 - Reg. Rights Agt.
<PAGE>
(viii) Enter into such customary agreements (including an
underwriting agreement or qualified independent underwriting agreement, in each
case, in customary form) and take all such other actions as the Majority in
Interest whose Registrable Securities are included in such registration or the
underwriters retained by such Majority in Interest, if any, reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities, including customary representations, warranties, indemnities and
agreements.
(ix) Make available for inspection, by each such Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and the attorney, accountant or other agent retained by the Majority
in Interest or any such underwriter (collectively, the "INSPECTORS"), all
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, if any, as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause Company's
officers, directors and employees, and those of Company's affiliates, if any, to
supply all information and respond to all inquiries reasonably requested by any
such Inspector in connection with such registration statement; PROVIDED, that
all such inspection, due diligence, and responses shall be undertaken during
normal business hours of the Company, without material disruption of the conduct
of the Company's business, and subject to customary confidentiality agreements.
(x) Use its best efforts to obtain a "cold comfort" letter from
the Company's appointed auditors in customary form and covering such matters of
the type customarily covered by "cold comfort" letters as the Majority in
Interest reasonably requests.
(xi) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to each Holder whose
Registrable Securities are included in the registration statement, as soon as
reasonably practicable, an earnings statement covering a period of at least
twelve months beginning after the effective date of the registration statement
(as the term "effective date" is defined in Rule 158(c) under the Securities
Act) which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder.
It shall be a condition precedent to the obligation of the Company to
take any action with respect to any Registrable Securities that each Holder
thereof shall furnish to the Company such information regarding such Holder, the
Registrable Securities and any other Shares in the Company held by such Holder
and the intended method of disposition of the Registrable Securities held by
such Holder as the Company
- Page 12 - Reg. Rights Agt.
<PAGE>
shall reasonably request and as shall be required in connection with the action
taken by the Company; and, furthermore, that each such Holder shall utilize such
Holder's best efforts to facilitate the completion and effectiveness of any
registration statement pursuant hereto including, without limitation, furnishing
customary information (for inclusion in any such Registration Statement and for
due diligence purposes in connection therewith), undertakings, and agreements in
connection therewith and not materially inconsistent with the other provisions
of this Agreement.
Each Holder agrees that, upon receipt of any notice from Company of the
happening of any event of the kind described in SECTION 2(D)(VI) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities until
such Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by SECTION 2(D)(VI) hereof, and, if so directed by the Company such
Holder will deliver to the Company (at the Company's expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event that the Company shall give any such notice, the period mentioned in
SECTION 2(D)(II) hereof shall be extended by the greater of (A) three (3) months
or (B) the number of days during the period from and including the date of the
giving of such notice pursuant to SECTION 2(D)(VI) hereof to and including the
date when the Holder shall have received the copies of the supplemented or
amended prospectus contemplated by SECTION 2(D)(VI) hereof.
(e) INDEMNIFICATION.
(i) INDEMNIFICATION BY COMPANY. In the event of any
registration of any Shares of the Company under the Securities Act pursuant to
this Agreement, the Company will indemnify and hold harmless, to the full extent
permitted by law, each Holder whose Registrable Securities are included in such
registration, its directors and officers, general partners, limited partners and
managing directors, each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls,
is controlled by or is under common control with any such Holder or any such
underwriter within the meaning of the Securities Act (and directors, officers,
controlling Persons, partners and managing directors, counsel, and accountants
of any of the foregoing) against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including (a) reasonable fees and
expenses of attorneys incurred by them in connection with investigating or
defending such loss, claim, liability, action or proceeding and (b) any amounts
paid in any settlement effected with Company's con-
- Page 13 - Reg. Rights Agt.
<PAGE>
sent, which consent will not be unreasonably withheld) to which any such Holder,
any such director or officer or general or limited partner or managing director
or any such underwriter or controlling Person, counsel or accountants may become
subject under the Securities Act, United States state securities "blue sky"
laws, common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) or expenses arise out
of or are based upon (A) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which such securities were registered under the Securities Act,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, (B) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (C) any violation or alleged violation by the Company
of any United States federal, state or common law rule or regulation applicable
to Company and relating to action required of or inaction by Company in
connection with any such registration; PROVIDED, HOWEVER, that Company shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by any Holder in its capacity as a shareholder in the
Company or any such director, officer, general or limited partner, managing
director, underwriter or controlling Person or their respective counsel or
accountants specifically stating that it is for use in the preparation thereof;
and, PROVIDED, FURTHER, that the Company shall not be liable to any Holder, any
Person who participates as an underwriter in the offering or sale of Registrable
Securities, if any, or any other Person, if any, who controls such underwriter
within the meaning of the Securities Act, or their respective counsel or
accountants pursuant to this SECTION 2(E)(I) with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented as the case may be, to the extent that any such loss, claim, damage
or liability of such Holder, underwriter or controlling or other Person results
from the fact that such underwriter sold Registrable Securities to a Person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus or of the final prospectus as then
amended or supplemented, whichever is most recent, if the Company has previously
furnished copies thereof to such underwriter and such final prospectus, as then
amended or supplemented, had corrected any such misstatement or omission.
- Page 14 - Reg. Rights Agt.
<PAGE>
The indemnity provided for herein shall remain in full force and effect
regardless of any investigation made by or on behalf of any Holder or any such
director, officer, general partner, limited partner, managing director,
underwriter or controlling Person or their respective counsel or accountants and
shall survive the transfer of such securities by such Holder.
(ii) INDEMNIFICATION BY HOLDER AND UNDERWRITERS. The Company
will require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with the provisions hereof, that the
Company shall have received an undertaking reasonably satisfactory to it from
each Holder or any underwriter of Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in PARAGRAPH
(I) above) the Company and its directors, officers, controlling Persons and all
other prospective sellers and their respective directors, officers, general and
limited partners, managing directors, and their respective controlling Persons
and the counsel and accountants of each of the foregoing with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or its representatives through an
instrument duly executed by or on behalf of any such Holder or any underwriter
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any Holder, any underwriters or any of
their respective directors, officers, general or limited partners, managing
directors or controlling Persons or their respective counsel or accountants and
shall survive the transfer of such securities by any Holder, PROVIDED, HOWEVER,
that no Holder shall be liable in the aggregate for any amounts exceeding the
product of the sale price per Registrable Security and the number of Registrable
Securities being sold pursuant to such registration statement or prospectus by
such Holder.
(iii) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this SECTION 2(E), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, promptly give
written notice to the indemnifying party of the
- Page 15 - Reg. Rights Agt.
<PAGE>
commencement of such action, PROVIDED, HOWEVER, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
SECTION 2(E), except to the extent that the indemnifying party is actually
materially prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties arises in respect of such claim after the
assumption of the defense thereof, and the indemnifying party will not be
subject to any liability for any settlement made without its consent (which
consent shall not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel in any single jurisdiction for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels as may be reasonably
necessary. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
(iv) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subsections of this SECTION 2(E) (with appropriate
modifications) shall be given by the Company and each Holder whose Registrable
Securities are included pursuant to this Agreement in any registration statement
under the Securities Act, to the full extent permitted by applicable law, with
respect to any required registra-
- Page 16 - Reg. Rights Agt.
<PAGE>
tion or other qualification of securities under any United States federal or
state law or regulation or governmental authority other than the Securities Act.
(v) CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this SECTION 2(E) is for any reason held to be unenforceable although applicable
in accordance with its terms, the Company, and each Holder and the underwriters
of Registrable Securities included in the applicable registration shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the Company,
each such Holder and the underwriters, in such proportions that the underwriters
are responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the prospectus bears to the
initial public offering price appearing thereon and the Company and each such
Holder are responsible for the balance; PROVIDED, HOWEVER, that 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 was not
guilty of such fraudulent misrepresentation. As between the Company and each
Holder, such parties shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect (A) the relative
benefits received by the Company, on the one hand, and each such Holder on the
other hand, from the offering of the Registrable Securities and any other
securities included in such offering, and (B) the relative fault of the Company,
on the one hand, and each such Holder on the other, with respect to the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or any such Holder, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Holders agree that it would not
be just and equitable if contribution pursuant to this SECTION 2(E) were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein.
Notwithstanding anything to the contrary contained herein, the Company and the
Holders agree that any contribution required to be made by any Holder pursuant
to this SECTION 2(E) shall not exceed the net proceeds from the offering of
Registrable Securities (before deducting expenses) received by the appli-
- Page 17 - Reg. Rights Agt.
<PAGE>
cable Holder with respect to such offering. For purposes of this SECTION 2(E),
each Person, if any, who controls any Holder or an underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such Holder or such underwriter, and each director of the
Company, each officer of the Company who signed the registration statement, and
each Person, if any, who controls Company within the meaning of Section 15 of
the Securities Act shall have the same rights to contribution as the Company.
(f) RULE 144. At all times after a public offering of any of the
Company's Shares, the Company agrees that it will file in a timely manner all
reports required to be filed by it pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and, if at any time Company is not
required to file such reports, it will make available to the public, to the
extent required to permit the sale of Shares by each Holder pursuant to Rule
144, current information about itself and its activities as contemplated by Rule
144 under the Securities Act, as such Rule may be amended from time to time.
Notwithstanding the foregoing, the Company may deregister any class of its
equity securities under Section 12 of the Exchange Act or suspend its duty to
file reports with respect to any class of its securities pursuant to Section
15(d) of the Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
3. MISCELLANEOUS.
(a) REMEDIES. Each party to this Agreement, in addition to being
entitled to exercise all rights provided herein, in the applicable Subscription
Agreement or granted by law, including recovery of liquidated or other damages,
will be entitled to seek specific performance of its rights under this
Agreement.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is materially inconsistent with the rights granted to any Holder in this
Agreement or otherwise materially conflicts with the provisions hereof. The
rights granted to each Holder hereunder do not materially conflict with and are
not materially inconsistent with the rights granted to the holders of Company's
securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the party against which the same
is sought to be enforced has obtained the written consent of each of the other
parties hereto.
- Page 18 - Reg. Rights Agt.
<PAGE>
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to any Holder, at the address set forth beneath such Holder's
name on the signature pages hereof;
(ii) if to Company, c/o:
eXodus Technologies, Inc.
11130 NE 33rd Place, Suite 250
Bellevue, Washington 98004
Attention: David M. Barnes
Vice President and CFO
Telecopy No.: 206-803-5438
with a copy to:
Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel
153 East 53rd Street
New York, New York 10022
Attention: Stephen A. Weiss, Esq.
Andrew J. Cosentino, Esq.
Telecopy No.: 212-223-7161
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the U.S. Mail, First Class postage prepaid, if
mailed; when answered back, if telexed; when receipt properly acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
including without limitation and without the need for an express assignment,
subsequent holders of Registrable Securities; PROVIDED, HOWEVER, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a holder unless and to the extent such successor or assign acquired
Registrable Securities from a Holder.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in
- Page 19 - Reg. Rights Agt.
<PAGE>
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) 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 LAW RULES THEREOF.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) ENTIRE AGREEMENT. This Agreement together with the Subscription
Agreements (and the exhibits thereto) is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
eXodus Technologies, Inc.
By: /s/ Robert Rubin
---------------------------
Name: Robert M. Rubin
-------------------------
Title: Chairman, CEO.
------------------------
- Page 20 - Reg. Rights Agt.
<PAGE>
THE HOLDERS:
GOODLAND INTERNATIONAL INVESTMENT LTD.
By: /s/ Christiane Bosson
-----------------------------
Title: VP
--------------------------
Tax I.D. # NONE
---------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
140,000
------------------------
No. of AUGI Warrants:
122,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$3,501,225.00
------------------------
- Page 21 -AUGI Reg. Rts Agt.
<PAGE>
WEYBURN OVERSEAS LTD.
By: /s/ Christiane Bosson
-----------------------------
Title: VP
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Corner House
20 Parliament Street
Hamilton HM12 Bermuda
Attention: Mr. Geoff Tirman
No. of Preferred Shares:
60,000
------------------------
No. of AUGI Warrants:
52,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$1,500,525.00
------------------------
- Page 22 -AUGI Reg. Rts Agt.
<PAGE>
PORTER PARTNERS LP
By: /s/ Jeffry H. Porter
-----------------------------
Title: General Managing Partner
--------------------------
Tax I.D. #: 94-3152540
-------------------
Address: 100 Shoreline
Suite 211B
Mill Valley, CA. 94941
Attn: Mr. Jeff Porter
No. of Preferred Shares:
26,000
------------------------
No. of AUGI Warrants:
22,750
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$650,210.00
------------------------
- Page 23 -AUGI Reg. Rts Agt.
<PAGE>
EDJ LIMITED
By: /s/ Patricia N. Sandford
-----------------------------
Title: President
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Deltec Panamerica
Trust Co.
Deltec House
Lyford Cay
Box N-3229
Nassau, Bahamas
Attn: Ms. Patricia Sandford
No. of Preferred Shares:
6,000
------------------------
No. of AUGI Warrants:
5,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$150,052.50
------------------------
- Page 24 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK CAPITAL, L.P.
By: /s/ Lee E. Mikles
-----------------------------
Title: Chairman/G.P.
--------------------------
Tax I.D. #: 95-4396374
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
15,360
------------------------
No. of AUGI Warrants:
13,440
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$384,134.40
------------------------
- Page 25 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK INTERNATIONAL LTD.
By: /s/ Lee E. Mikles
-----------------------------
Title: Investment Advisor
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Kernco Trust
2 Rue Jargonnant
P.O. Box 6432
1211 Geneva 6, Switzerland
Address for Notice:
100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
26,880
------------------------
No. of AUGI Warrants:
23,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$672,235.20
------------------------
- Page 26 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK OPPORTUNITY LP
By: /s/ Lee E. Mikles
-----------------------------
Title: Chairman/G.P.
--------------------------
Tax I.D. #: 95-4596249
-------------------
Address: 100 Wilshire Boulevard
15th Floor
Santa Monica, California 90401
Attn: Mr. Lee Mikles
Mikles/Miller Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 27 -AUGI Reg. Rts Agt.
<PAGE>
KODIAK OPPORTUNITY OFFSHORE LIMITED
By: /s/ Lee E. Mikles
-----------------------------
Title: Chairman
--------------------------
Tax I.D. #: NONE
-------------------
Address: c/o Citco Fund Services
Corporate Centre
West Bay Road
P.O.B. 31106, SMB
Grand Cayman, Cayman Islands BWI
Attn: Mr. Patrick Agemian
No. of Preferred Shares:
1,920
------------------------
No. of AUGI Warrants:
1,680
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$48,016.80
------------------------
- Page 28 -AUGI Reg. Rts Agt.
<PAGE>
THE GALILEO FUND, L.P.
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: 04-3258283
-------------------
Address: 141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC DDJ Galileo Fund, L.P.
No. of Preferred Shares:
112,800
------------------------
No. of AUGI Warrants:
98,700
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$2,820,987.00
------------------------
- Page 29 -AUGI Reg. Rts Agt.
<PAGE>
KEPLER OVERSEAS CORP.
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Kepler Overseas Corp.
c/o Goldman Sachs (Cayman)
Harbor Center, 2nd Fl.
George Town
Post Offfice Box 896
Grand Cayman Islands
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC Kepler Overseas Corp.
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 30 -AUGI Reg. Rts Agt.
<PAGE>
CROCODILE I, LLC
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Crocodile I, LLC
c/o DDJ Capital Management, LLC
141 Linden Street, S-4
Wellesley, MA 02181
Address for Delivery of Certificates:
Goldman Sachs & Co.
Attn.: Robin Harris, 44th Fl.
One New York Plaza
New York, N.Y. 10004
Phone: (212) 902-4108
Facsimile: (212) 902-0741
Securities to Be Registered in Following
Name: Goldman Sachs & Company
FFC Crocodile I, LLC
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 31 -AUGI Reg. Rts Agt.
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
1,680 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, KODIAK OPPORTUNITY OFFSHORE
LIMITED, or his/her/its registered assigns (hereinafter referred to as the
"Holder") is entitled to purchase, subject to the terms and conditions
hereof, from AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the
"Company"), 1,680 shares of common stock of the Company, par value $.01 per
share (the "Common Stock"), at any time from January 8, 1997 (the "First
Exercise Date") and ending at 5:00 p.m. Eastern Standard Time on January 7,
2002, at an exercise price per share (the "Exercise Price") equal to $8.5772.
The number of shares of Common Stock purchasable upon exercise of this
Warrant (the "Warrant") and the Exercise Price shall be subject to adjustment
from time to time upon the occurrence of certain events as set forth below.
The shares of Common Stock receivable upon exercise of this Warrant, as
adjusted from time to time, are sometimes referred to hereinafter as
"Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
13,440 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, KODIAK CAPITAL, L.P., or
his/her/its registered assigns (hereinafter referred to as the "Holder") is
entitled to purchase, subject to the terms and conditions hereof, from
AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the "Company"), 13,440
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at any time from January 8, 1997 (the "First Exercise Date") and
ending at 5:00 p.m. Eastern Standard Time on January 7, 2002 (the
"Termination Date"), at an exercise price per share (the "Exercise Price")
equal to $8,5772. The number of shares of Common Stock purchasable upon
exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
23,250 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON [FIFTH ANNIVERSARY OF CLOSING
DATE]
This is to verify that, FOR VALUE RECEIVED, KODIAK INTERNATIONAL LTD., or
his/her/its registered assigns (hereinafter referred to as the "Holder") is
entitled to purchase, subject to the terms and conditions hereof, from
AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the "Company"), 23,250
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at any time from January 8, 1997 (the "First Exercise Date") and
ending at 5:00 p.m. Eastern Standard Time on January 7, 2002 (the
"Termination Date"), at an exercise price per share (the "Exercise Price")
equal to $8.5772. The number of shares of Common Stock purchasable upon
exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
3,360 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, KODIAK OPPORTUNITY LP, or
his/her/its registered assigns (hereinafter referred to as the "Holder") is
entitled to purchase, subject to the terms and conditions hereof, from
AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the "Company"), 3,360
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at any time from January 8, 1997 (the "First Exercise Date") and
ending at 5:00 p.m. Eastern Standard Time on January 8. 2002 (the
"Termination Date"), at an exercise price per share (the "Exercise Price")
equal to $8.5772. The number of shares of Common Stock purchasable upon
exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
5,250 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, EDJ LIMITED, or his/her/its
registered assigns (hereinafter referred to as the "Holder") is entitled to
purchase, subject to the terms and conditions hereof, from AMERICAN UNITED
GLOBAL, INC., a Delaware corporation (the "Company"), 5,250 shares of common
stock of the Company, par value $.01 per share (the "Common Stock"), at any
time from January 8, 1997 (the "First Exercise Date") and ending at 5:00 p.m.
Eastern Standard Time on January 7, 2002 (the "Termination Date"), at an
exercise price per share (the "Exercise Price") equal to $8.5772. The number
of shares of Common Stock purchasable upon exercise of this Warrant (the
"Warrant") and the Exercise Price shall be subject to adjustment from time to
time upon the occurrence of certain events as set forth below. The shares of
Common Stock receivable upon exercise of this Warrant, as adjusted from time
to time, are sometimes referred to hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
22,750 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7,2002
This is to verify that, FOR VALUE RECEIVED, PORTER PARTNERS LP, or
his/her/its registered assigns (hereinafter referred to as the "Holder") is
entitled to purchase, subject to the terms and conditions hereof, from
AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the "Company"), 22,750
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at any time from January 8, 1997 (the "First Exercise Date") and
ending at 5:00 p.m. Eastern Standard Time on January 7, 2002 (the
"Termination Date"), at an exercise price per share (the "Exercise Price")
equal to $8.5772. The number of shares of Common Stock purchasable upon
exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
52,500 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, WEYBURN OVERSEAS LTD., or
his/her/its registered assigns (hereinafter referred to as the "Holder") is
entitled to purchase, subject to the terms and conditions hereof, from
AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the "Company"), 52,500
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at any time from January 8, 1997 (the "First Exercise Date") and
ending at 5:00 p.m. Eastern Standard Time on January 8, 2002 (the
"Termination Date"), at an exercise price per share (the "Exercise Price")
equal to $8.5772. The number of shares of Common Stock purchasable upon
exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
122,500 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, GOODLAND INTERNATIONAL
INVESTMENT LTD., or his/her/its registered assigns (hereinafter referred to
as the "Holder") is entitled to purchase, subject to the terms and conditions
hereof, from AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the
"Company"), 122,500 shares of common stock of the Company, par value $.01 per
share (the "Common Stock"), at any time from January 8, 1997 (the "First
Exercise Date") and ending at 5:00 p.m. Eastern Standard Time on January 7,
2002 (the "Termination Date"), at an exercise price per share (the "Exercise
Price") equal to $8.5772. The number of shares of Common Stock purchasable
upon exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
98,700 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, GOLDMAN SACHS & COMPANY FFC
DDJ GALILEO FUND, L.P., or his/her/its registered assigns (hereinafter
referred to as the "Holder") is entitled to purchase, subject to the terms
and conditions hereof, from AMERICAN UNITED GLOBAL, INC., a Delaware
corporation (the "Company"), 98,700 shares of common stock of the Company,
par value $.01 per share (the "Common Stock"), at any time from January 8,
1997 (the "First Exercise Date") and ending at 5:00 p.m. Eastern Standard
Time on January 8, 2002 (the "Termination Date"), at an exercise price per
share (the "Exercise Price") equal to $8.5772. The number of shares of
Common Stock purchasable upon exercise of this Warrant (the "Warrant") and
the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events as set forth below. The shares of Common Stock
receivable upon exercise of this Warrant, as adjusted from time to time, are
sometimes referred to hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
3,150 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, GOLDMAN SACHS & COMPANY FFC
KEPLER OVERSEAS CORP., or his/her/its registered assigns (hereinafter
referred to as the "Holder") is entitled to purchase, subject to the terms
and conditions hereof, from AMERICAN UNITED GLOBAL, INC., a Delaware
corporation (the "Company"), 3,150 shares of common stock of the Company, par
value $.01 per share (the "Common Stock"), at any time from January 8, 1997
(the "First Exercise Date") and ending at 5:00 p.m. Eastern Standard Time on
January 7, 2002 (the "Termination Date"), at an exercise price per share (the
"Exercise Price") equal to $8.5772. The number of shares of Common Stock
purchasable upon exercise of this Warrant (the "Warrant") and the Exercise
Price shall be subject to adjustment from time to time upon the occurrence of
certain events as set forth below. The shares of Common Stock receivable
upon exercise of this Warrant, as adjusted from time to time, are sometimes
referred to hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
3,150 Shares January 8, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON JANUARY 7, 2002
This is to verify that, FOR VALUE RECEIVED, GOLDMAN SACHS & COMPANY FFC
CROCODILE I, LLC, or his/her/its registered assigns (hereinafter referred to
as the "Holder") is entitled to purchase, subject to the terms and conditions
hereof, from AMERICAN UNITED GLOBAL, INC., a Delaware corporation (the
"Company"), 3,150 shares of common stock of the Company, par value $.01 per
share (the "Common Stock"), at any time from January 8, 1997 (the "First
Exercise Date") and ending at 5:00 p.m. Eastern Standard Time on January 7,
2002 (the "Termination Date"), at an exercise price per share (the "Exercise
Price") equal to $8.5772. The number of shares of Common Stock purchasable
upon exercise of this Warrant (the "Warrant") and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events
as set forth below. The shares of Common Stock receivable upon exercise of
this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
EXHIBIT B - FORM OF WARRANT
WARRANT TO PURCHASE
COMMON STOCK OF
AMERICAN UNITED GLOBAL, INC.
__________ Shares January __, 1997
Dix Hills, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT SHALL NOT BE
TRANSFERABLE AND MAY NOT BE DISPOSED OF, DIRECTLY OR INDIRECTLY, OTHER THAN IN
ACCORDANCE WITH THE TERMS HEREOF.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME ON [FIFTH ANNIVERSARY OF CLOSING
DATE]
This is to verify that, FOR VALUE RECEIVED, [INSERT NAME], or his/her/its
registered assigns (hereinafter referred to as the "Holder") is entitled to
purchase, subject to the terms and conditions hereof, from AMERICAN UNITED
GLOBAL, INC., a Delaware corporation (the "Company"), _______________ shares of
common stock of the Company, par value $.01 per share (the "Common Stock"), at
any time from [INSERT THE CLOSING DATE] (the "First Exercise Date") and ending
at 5:00 p.m. Eastern Standard Time on [INSERT THE FIFTH ANNIVERSARY OF THE
CLOSING DATE] (the "Termination Date"), at an exercise price per share (the
"Exercise Price") equal to [INSERT CLOSING DATE AVERAGE PRICE, AS CALCULATED IN
ACCORDANCE WITH THE TERM SHEET]. The number of shares of Common Stock
purchasable upon exercise of this Warrant (the "Warrant") and the Exercise Price
shall be subject to adjustment from time to time upon the occurrence of certain
events as set forth below. The shares of Common Stock receivable upon exercise
of this Warrant, as adjusted from time to time, are sometimes referred to
hereinafter as "Exercise Shares."
1. EXERCISE OF WARRANT; ISSUANCE OF EXERCISE SHARES.
a. This Warrant may be exercised in whole at any time or in part
from time to time on or after the First Exercise Date until and including the
Termination Date, upon surrender on any business day to the Company at its
principal office, presently located at the address of the Company set forth in
Paragraph 7 hereof (or such other office of the Company, if any, as shall
<PAGE>
theretofore have been designated by the Company by written notice to the
Holder), together with: (i) a completed and executed Notice of Warrant Exercise
in the form set forth in Appendix A hereto and made a part hereof and (ii)
payment of the full Exercise Price for the number of Exercise Shares set forth
in the Notice of Warrant Exercise, in lawful money of the United States of
America by certified check or cashier's check, made payable to the order of the
Company. The Warrant and all rights and options hereunder shall expire on the
Termination Date and shall be wholly null and void to the extent this Warrant is
not properly exercised prior to the Termination Date.
b. SHARE ISSUANCE UPON EXCHANGE. Upon surrender of this Warrant
certificate in connection with any exercise and payment of the applicable
Exercise Price pursuant to PARAGRAPH (A) above, the Company shall issue and
cause to be delivered with all reasonable dispatch to the Holder or, subject to
SECTION 6 hereof, in such name or names as the Holder may designate to the
Company in writing, a certificate or certificates for the number of full
Exercise Shares so purchased upon the exercise of this Warrant and, if
applicable, a new Warrant certificate to the Holder covering the remaining
number of shares for which this Warrant was not so exercised. Such certificate
or certificates shall be deemed to have been issued and any such person so
designated to be named therein shall be deemed to have become a holder of such
Exercise Shares and entitled to all of the rights of a stockholder of the
Company with respect to such Exercise Shares as of the close of business on the
date of the surrender of this Warrant and payment of the Exercise Price in full
or, if the stock transfer books of the Company shall then be closed, on the
first date thereafter on which the stock transfer books of the Company are open.
c. EXERCISE SHARES FULLY PAID AND NON-ASSESSABLE. The Company
agrees and covenants that all Exercise Shares issuable upon the due exercise of
this Warrant will, upon issuance in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Paragraph 2 hereof, the Company
shall not be obligated to pay), liens, charges and security interests created by
the Company with respect to the issuance thereof.
d. RESERVATION OF EXERCISE SHARES. The Company agrees and covenants
that at all times prior to the Termination Date it will have authorized, and
hold in reserve, at least the number of Exercise Shares issuable upon the full
exercise of this Warrant.
2. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Exercise Shares upon the
exercise of this Warrant; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issue of this Warrant or of any certificates for Exercise Shares in a
name other than that of the Holder upon the exercise of this Warrant, and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting
- Page 2 - AUGI Warrant
<PAGE>
the issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has been
paid.
3. RIGHTS OF HOLDER. The Holder shall not, by virtue of anything
contained in this Warrant or otherwise (except upon exercise of this Warrant,
with respect to the Exercise Shares purchased thereby), be entitled to any right
whatsoever, either in law or equity, of a stockholder of the Company, including
without limitation, the right to receive dividends or to vote or to consent or
to receive notice as a stockholder in respect of the meetings of stockholders or
the election of directors of the Company or any other matter.
4. REGISTRATION OF TRANSFERS AND EXCHANGES. This Warrant shall be
transferable, in whole or in part, subject to the provisions of Paragraph 6
hereof, only upon the books of the Company to be maintained by it for that
purpose, upon surrender of this Warrant to the Company at its principal office
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to the Company and duly executed by the Holder or
by the duly appointed legal representative thereof or by a duly authorized
attorney and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. In all cases of transfer by an attorney, the
original power of attorney, duly approved, or an official copy thereof, duly
certified, shall be deposited and remain with the Company. In case of transfer
by executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be required
to be deposited and remain with the Company in its discretion. Upon any such
registration of transfer, a new Warrant shall be issued to the transferee named
in such instrument of transfer (and, in the case of a transfer of part of this
Warrant, a new Warrant representing the portion of this Warrant which was not
transferred shall be issued to the Holder), and the surrendered Warrant shall be
cancelled by the Company.
5. ADJUSTMENT OF WARRANT. The Exercise Price and the number and kind of
securities issuable upon exercise of this Warrant shall be subject to adjustment
from time to time as set forth below:
a. If the Company shall at any time (i) pay a dividend or make a
distribution on the Common Stock in shares of its Common Stock, (ii) subdivide
its outstanding Common Stock or (iii) combine its outstanding Common Stock into
a smaller number of shares, the number of shares of Common Stock which may be
purchased upon exercise of this Warrant shall be adjusted so that the number of
shares thereafter purchasable upon exercise of this Warrant shall be equal to
the number of shares which the Holder would have been entitled to receive after
the happening of such event had the Warrant been exercised immediately prior to
such event. Any adjustment made pursuant to this subparagraph (a) shall become
- Page 3 - AUGI Warrant
<PAGE>
effective retroactively to the record date in the case of a dividend and shall
become effective on the effective date, in the case of any subdivision or
combination.
b. If the Company shall issue by reorganization or reclassification
of its Common Stock other securities of the Company (including any such
reorganization or reclassification in connection with a consolidation or merger
of the Company with another corporation, except where the Company is the
surviving corporation and there is no reclassification or change of outstanding
securities issuable upon exercise of this Warrant), the Holder shall thereafter
have the right to receive upon exercise of this Warrant the kind and number of
shares of stock or other securities or property which he would have been
entitled to receive upon the happening of any such reorganization or
reclassification, had this Warrant been exercised immediately prior thereto;
and, in any case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set forth
with respect to rights and interests thereafter of the Holder, to the end that
the provisions set forth herein (including the specified changes in and other
adjustments of the conversion rate) shall thereafter be applicable, as near as
reasonably practical, in relation to any shares of stock or other securities or
other property thereafter deliverable upon the exercise of this Warrant. Any
adjustment made pursuant to this subparagraph (b) shall become effective
retroactively to the effective date of such reorganization or reclassification.
c. After any adjustment of the number or kind of shares or other
securities or property issuable upon exercise of this Warrant pursuant to the
provisions of this Paragraph 5, the Exercise Price shall also be adjusted so
that the aggregate Exercise Price thereafter payable upon exercise of this
Warrant shall be equal to the aggregate Exercise Price which would have been
payable upon exercise of this Warrant immediately prior to such adjustment in
the number of kind of shares or other securities or other property issuable upon
exercise of this Warrant.
d. No adjustment in the number of shares of Common Stock issuable
upon exercise of this Warrant, or of the Exercise Price, shall be required to be
made unless such adjustment would require an increase or decrease of at least
one percent (1%); PROVIDED, HOWEVER, that any adjustments which by reason of
this subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Paragraph 5 shall be made to the nearest cent or one-one hundredth of a share,
as the case may be, but in no event shall the Company be obligated to issue
fractional shares upon exercise of this Warrant, and any fractional shares
issuable upon exercise shall be rounded up to the next whole share.
- Page 4 - AUGI Warrant
<PAGE>
e. Whenever any adjustment shall be made in the number or kind of
shares or other securities or property issuable upon exercise of this Warrant
pursuant to the provisions of this Paragraph 5, or in the Exercise Price, the
Company will forthwith cause a notice stating the adjustment to be mailed to the
Holder.
f. In case at any time:
(i) The Company shall declare any dividend upon or distribution
in respect of its Common Stock payable otherwise than in cash or in Common Stock
of the Company; or
(ii) The Company shall offer for subscription to all of the
holders of its Common Stock any additional shares of stock of any class or any
other securities convertible into shares of stock or any rights to subscribe
thereto; or
(iii) There shall be any capital reorganization or
reclassification of the capital stock of the Company, or a sale of all or
substantially all of the assets of the Company, or a consolidation or merger of
the Company with another corporation, other than any transaction in which the
Company is the surviving corporation and there is no reclassification or change
of outstanding securities issuable upon exercise of this Warrant and other than
a merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants other than a change in par value (or from par value to
no par value or from no par value to par value); or
(iv) There shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall cause to be mailed to
the Holder, at the earliest practicable time (and, in any event, not less than
10 days before any record date or other date set for definitive action), written
notice of the date on which the books of the Company shall close or a record
shall be taken for such reorganization, reclassification, sale, consolidation,
merger, dissolution, liquidation or winding up, as the case may be. Such notice
shall also set forth such facts as shall indicate the effect of such action (to
the extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of stock and other securities and
property deliverable upon exercise of this Warrant. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in said dividend, distribution or subscription rights or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, sale, consolidation,
merger, dissolution, liquidation or winding up as the case may be (on which
- Page 5 - AUGI Warrant
<PAGE>
date, in the event of voluntary or involuntary dissolution, liquidation or
winding up of the Company, the right to exercise this Warrant shall terminate).
Notwithstanding anything in this paragraph (f) to the contrary, however, it is
agreed that failure of the Company to give any such notice of corporate action
shall not invalidate such corporate action.
6. RESTRICTIONS ON TRANSFERABILITY - RESTRICTIVE LEGEND. Neither this
Warrant nor the Exercise Shares shall be transferable except in accordance with
the provisions of this paragraph.
a. RESTRICTIONS ON TRANSFER; INDEMNIFICATION. Neither this Warrant
nor any Exercise Shares may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale thereof
within the meaning of the Securities Act of 1933, as amended (the "Act"), unless
(i) such security has been registered for sale under the Act and registered or
qualified under applicable state securities laws relating to the offer and sale
of securities, or (ii) exemptions from the registration requirements of the Act
and the registration or qualification requirements of all such state securities
laws are available and the Company shall have received an opinion of counsel
satisfactory to the Company that the proposed sale or other disposition of such
securities may be effected without registration under the Act and would not
result in any violation of any applicable state securities laws relating to the
registration or qualification of securities for sale.
The Holder agrees to indemnify and hold harmless the Company against
any loss, damage, claim or liability arising from the disposition of this
Warrant or any Exercise Shares held by the Holder or any interest therein in
violation of the provisions of this Paragraph 6.
b. RESTRICTIVE LEGENDS. Unless and until otherwise permitted by
this Paragraph 6, this Warrant, each warrant issued to the Holder or to any
transferee or assignee of this Warrant, and each Certificate representing
Exercise Shares issued upon exercise of this Warrant or any warrant issued to
the Holder or to any transferee or assignee of this Warrant, or to any
transferee of the person to whom the Exercise Shares were issued, shall bear a
legend setting forth the requirements of paragraph (a) of this Paragraph 6,
together with such other legend or legends as may otherwise be deemed necessary
or appropriate by counsel to the Company.
c. NOTICE OF PROPOSED TRANSFERS. For so long as this Warrant or any
Exercise Shares acquired pursuant hereto shall bear restrictive legends pursuant
to this Warrant, prior to any transfer, offer to transfer or attempted transfer
of this Warrant or any Exercise Shares, the Holder of such security shall give
written notice to the Company of such Holder's intention to effect such
transfer. Each such notice (i) shall describe the manner and
- Page 6 - AUGI Warrant
<PAGE>
circumstances of the proposed transfer in sufficient detail, and shall contain
an undertaking by the person giving such notice to furnish such other
information as may be required, to enable counsel satisfactory to the Company to
render the opinions referred to below, and (ii) shall designate the counsel for
the person giving such notice, such counsel to be satisfactory to the Company.
The person giving such notice shall submit a copy thereof to the counsel
designated in such notice, and the following provisions shall apply:
(i) If, in the opinion of such counsel, the proposed transfer of
this Warrant or Exercise Shares, as appropriate, may be effected without
registration of such security under the Act, the Company shall, as promptly as
practicable, so notify the holder of such security and such holder shall
thereupon be entitled to transfer such security in accordance with the terms of
the notice delivered by such holder to the Company. Each certificate evidencing
the securities thus to be transferred (and each certificate evidencing any
untransferred balance of the securities evidenced by such certificate) shall
bear the restrictive legends referred to in subparagraph (b) above, unless in
the opinion of such counsel such legends are not required in order to insure
compliance with the Act.
(ii) If, in the opinion of such counsel, the proposed transfer of
securities may not be effected without registration under the Act, the Company
shall, as promptly as practicable, so notify the holder thereof. However, the
Company shall have no obligation pursuant to this Warrant to register such
securities under the Act.
The holder of the securities giving the notice under this subparagraph
(c) shall not be entitled to transfer any of the securities until receipt of
notice from the Company under paragraph (i) of this subparagraph (c) or
registration of such securities under the Act has become effective.
d. REMOVAL OF LEGEND. The Company shall, at the request of any
registered holder of a Warrant or Exercise Share, exchange the certificate
representing such security for a certificate representing the same security not
bearing the restrictive legends required by subparagraph (b) if, in the opinion
of counsel satisfactory to the Company, such restrictive legends are no longer
necessary.
7. NOTICES. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been (a) when received, if
delivered in person; (b) when sent, if sent by telecopier and confirmed within
forty-eight (48) hours by letter mailed or delivered to the party to be notified
at its address set forth herein; or (c) five (5) days following the mailing
thereof if
- Page 7 - AUGI Warrant
<PAGE>
mailed by certified first class mail, postage prepaid, return receipt request,
in any such case as follows:
If to the Company, to:
American United Global, Inc.
25 Highland Boulevard
Dix Hills, New York 11746
Attention: Mr. Robert M. Rubin, President
and Chief Executive Officer
Telecopier: (516) 254-2136
If to the Holder, to:
[INSERT NAME AND ADDRESS
]
Telecopier: [COMPLETE]
8. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Warrant without the approval of the Holder in order to
cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision, or to make any
other provisions in regard to matters herein or questions arising hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interest of the Holder. Except as set forth above, no term
of this Warrant may be amended or waived without the prior written consent of
the Company and the Holder.
9. SUCCESSORS AND ASSIGNS. This Warrant shall inure to the benefit of
and be binding on the respective successors, assigns and legal representatives
of the Holder, subject to the provisions of Paragraph 6 hereof, and the Company.
10. SEVERABILITY. If for any reason any provision, paragraph or term of
this Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and
paragraphs of this Warrant shall be deemed to be severable. To the extent
permitted by applicable law, the Holder, by accepting this Warrant, hereby
waives any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
11. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to its conflict
of laws provisions.
- Page 8 - AUGI Warrant
<PAGE>
12. HEADINGS. Paragraph and subparagraph headings, used herein are
included herein for convenience of reference only shall
not affect the construction of this Warrant nor constitute a part of this
Warrant for any other purpose.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date and year first above written.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Robert M. Rubin
---------------------------------
Robert M. Rubin, President and
Chief Executive Officer
- Page 9 - AUGI Warrant
<PAGE>
APPENDIX A
----------
NOTICE OF WARRANT EXERCISE
--------------------------
Pursuant to a Warrant issued by American United Global, Inc., a Delaware
corporation (the "Company"), to the undersigned dated as of January __, 1997,
the undersigned hereby irrevocably elects to exercise its warrant to the extent
of purchasing _________________ shares of Common Stock (the "Exercise Shares")
of the Company as provided for therein.
The undersigned hereby represents and agrees that the Exercise Shares
purchased pursuant hereto are being purchased for investment and not with a view
to the distribution of resale thereof, and that the undersigned understands that
said Exercise Shares have not been registered under the Securities Act of 1933,
as amended.
Payment of the full purchase price of the Exercise Shares is enclosed
herewith, in the form of a check made payable to the Company.
The undersigned requests that a certificate for the Exercise Shares be
issued in the name of:
_______________________________________
_______________________________________
_______________________________________
(Please print name, address and social security number)
Date:______________________________, ______
Address:_____________________________________________
_____________________________________________
_____________________________________________
Signature:___________________________________________
- Page 10 - AUGI Warrant
<PAGE>
STATE OF DELAWARE
PAGE 1
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "AMERICAN UNITED GLOBAL, INC.", FILED IN THIS OFFICE ON THE EIGHT
DAY OF JANUARY, A.D. 1997, AT 10:01 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
--------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8279274
DATE: 01-09-97
[SEAL]
<PAGE>
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES B-2 PREFERRED STOCK
OF
AMERICAN UNITED GLOBAL, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Robert M. Rubin, President of American United Global, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the said Corporation, the said Board of
Directors, on January 2, 1997, adopted the following resolution creating the
terms and conditions of the series of 500,000 shares of Series B Preferred Stock
designated as Series B-2 Preferred Stock, $.01 par value per share:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
1. NUMBER AND DESIGNATION. The designation of the series of Series
B Preferred Stock authorized by this resolution shall be "Series B-2 Preferred
Stock" (the "Series B-2 Preferred"). The number of shares of Series B-2
Preferred, $.01 par value per share, authorized by this resolution shall be
500,000.
2. RANK. The Series B-2 Preferred shall, with respect to rights on
liquidation, winding up and dissolution, rank prior to all classes of Common
Stock, $.01 par value per share, of the Corporation (the "Common Stock"). All
equity securities of the Corporation to which the Series B-2 Preferred ranks
prior (whether upon liquidation, dissolution, winding up or otherwise),
including the Common Stock, are collectively referred to herein as the "Junior
Securities." All equity securities of the Corporation to which the Series B-2
Preferred ranks junior (whether upon liquidation, dissolution, winding up or
otherwise) are collectively
- Page 1 - Certificate of Designation -
<PAGE>
referred to herein as the "Senior Securities." All equity securities of the
Corporation with which the Series B-2 Preferred ranks on a parity (whether upon
liquidation, dissolution, winding up or otherwise) are collectively referred to
herein as the "Parity Securities." The Series B-2 Preferred ranks on a parity
(whether upon liquidation, dissolution, winding up or otherwise) with the Series
A Preferred Stock and the Series B-1 Preferred Stock of the Corporation. The
Series B-2 Preferred shall be subject to the creation of Junior Securities,
Senior Securities and Parity Securities PROVIDED, that no Senior Securities
shall be issued without the prior approval of at least two-thirds (2/3) of the
outstanding Series B-2 Preferred, voting as a class.
3. DIVIDENDS. Holders of shares of Series B-2 Preferred shall be
entitled to receive, if, when, and as declared payable by the Board of Directors
from funds legally available therefor, dividends on each share of Series B-2
Preferred at a rate per annum of 7.00% of the "Liquidation Preference" (as
defined below) of such shares, payable quarterly with the first such payment
date being March 31, 1997 and subsequent payment dates being on the last day of
each subsequent calendar quarter that the Series B-2 Preferred shall be
outstanding. Such dividends shall be payable, at the option of the Corporation,
either in cash or in additional whole or fractional shares of the Series B-2
Preferred. Each such dividend shall be paid to the holders of record of shares
of the Series B-2 Preferred as they appear on the stock register of the
Corporation on such record date, not exceeding 30 days nor less than 10 days
preceding the payment date of such dividend as shall be fixed by the Board of
Directors of the Corporation or a duly authorized committee thereof.
4. VOTING RIGHTS. Except as otherwise provided by law, the holders
of the Series B-2 Preferred shall have no power to vote on any question or in
any proceeding, or to be represented at or to receive notice of any meeting of
the stockholders of the Corporation.
5. REDEMPTION. Neither the Corporation nor the holders of the
Series B-2 Preferred shall have any right at any time to require the redemption
of any of the Series B-2 Preferred, except upon and by reason of any
liquidation, dissolution or winding up of the Corporation, as and to the extent
hereinafter provided. Nothing herein contained, however, shall be deemed to
prohibit or impair the Corporation's ability, by agreement with any holder(s) of
Series B-2 Preferred, to redeem any or all of the outstanding shares of Series
B-2 Preferred at any time and from time to time, out of funds legally available
therefor.
- Page 2 - Certificate of Designation -
<PAGE>
6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of any Junior Securities unless, prior thereto, the holders of shares of Series
B-2 Preferred shall have received $25.00 per share in cash plus the amount of
any and all accrued and unpaid dividends in respect of the Series B-2 Preferred
(such aggregate amount being referred to as the "Liquidation Preference").
Following the payment of the full amount of the Liquidation Preference, no
additional distributions shall be made to the holders of Series B-2 Preferred.
(b) In the event there are not sufficient assets available to
permit payment in full of the Liquidation Preference and the liquidation
preferences of all other classes of Preferred Stock, if any, which rank on a
parity with the Series B-2 Preferred, then such remaining assets shall be
distributed ratably to the holders of the Series B-2 Preferred and such Parity
Securities in proportion to the total amounts (including, but not limited to,
the amount of liquidation preference) to which the holders of such shares of
Series B-2 Preferred and such Parity Securities are then entitled.
(c) Neither the merger or consolidation of the Corporation into
or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or lease of all
or any part of the assets of the Corporation, shall, without further corporate
action, be deemed to be a liquidation, dissolution or winding up of the affairs
of the Corporation within the meaning of this SECTION 6.
7. CONVERSION RIGHTS.
(a) OPTIONAL OR MANDATORY CONVERSION. Subject to the terms and
conditions of this SECTION 7 (including, without limitation, the restrictions on
conversions hereunder applicable at certain times as set forth below), the
holder of any shares of Series B-2 Preferred shall have the right, at the
holder's option from time to time, to convert (any such conversion, an "Optional
Conversion") all or any portion of such shares into such number of fully paid
and nonassessable shares of Common Stock as is determined based on the factors
and circumstances set forth below. On December 31, 1999, all shares of Series
B-2 Preferred not previously converted into Common Stock shall, without any
further action or approval of or on the part of, any of the holders of the
Series B-2 Preferred, be automatically converted (any such conversion, a
"Mandatory Conversion") into such number of fully
- Page 3 - Certificate of Designation -
<PAGE>
paid and nonassessable shares of Common Stock as is determined based on the
factors and circumstances set forth below:
(i) CONVERSION PRICE FORMULA. Upon any Optional
Conversion or Mandatory Conversion, each full share of Series B-2 Preferred so
converted shall be converted into whole shares of Common Stock, at a price per
share equal to the LESSER of "Price (A)" or "Price (B)", where:
(A) "Price (A)" is equal to 105% of the average daily
closing bid price of the Common Stock as reported on The Nasdaq National Market
or other national securities exchange which is the principal market for the
Common Stock for the ten (10) trading days (the "Average Price") immediately
preceding [INSERT THE CLOSING DATE BY REFERENCE OR OTHERWISE] (the "Measuring
Date") (the "Measuring Date Average Price"); PROVIDED, that if the Average Price
immediately preceding the first anniversary of the Measuring Date (the
"Anniversary Average Price") shall be LESS than the Measuring Date Average
Price, the conversion price set forth in this clause (A) shall be reset to equal
105% of the Anniversary Average Price; and
(B) "Price (B)" is equal to 82.5% of the Average Price
immediately preceding the date any shares of Series B-2 Preferred are converted
into Common Stock (the "Conversion Date Average Price").
(ii) CONVERSION PERIOD. No holder shall be entitled to
exercise the holder's right to Optional Conversion of the holder's Series B-2
Preferred other than as follows:
(A) no Series B-2 Preferred may be converted during
the first 60 days after Measuring Date;
(B) up to 34% of the holder's Series B-2 Preferred, in
the aggregate, may be converted by the holder from time to time after the 60th
day after the Measuring Date;
(C) up to an additional 33% of the holder's Series B-2
Preferred, in the aggregate, may be converted by the holder from time to time
after the 90th day after the Measuring Date, for a cumulative total of up to 67%
of such holder's Series B-2 Preferred having been converted into Common Stock;
(D) up to an additional 33% of the holder's Series B-2
Preferred, in the aggregate, may be converted by the holder from time to time
after the 120th day after the Measuring Date, for a cumulative total of up to
100% of such holder's Series B-2 Preferred having been converted into Common
Stock.
- Page 4 - Certificate of Designation -
<PAGE>
(iii) RESTRICTIONS ON CONVERSION. In the event that the
Average Price of the Common Stock calculated at any time on or after the date
(the "Restriction Commencement Date") which is six months (6) after the
effective date of the Form S-3 registration statement which the Corporation has
undertaken to file pursuant to certain Subscription Agreements dated as of
January 3, 1997 by and among the Corporation, eXodus Technologies, Inc., and the
investors thereunder, and prior to the date of conversion, shall be $3.50 or
less, the Corporation shall have the right to RESTRICT the rights of the holders
to convert the Series B-2 Preferred into Common Stock in the manner provided
below.
(A) PERCENTAGE CONVERSIONS. No holder may convert into
Common Stock during any interval of thirty (30) consecutive calendar days (each
such interval, a "Conversion Window") more than 20% of the total number of
shares of Series B-2 Preferred originally acquired by such holder from the
Corporation. The first Conversion Window shall commence on the Restriction
Commencement Date, and each subsequent Conversion Window shall commence at the
conclusion of the immediately preceding Conversion Window.
(B) STANDSTILL. On not more than ONE occasion in any
six month period (each such period, a "Six Month Period"), the Corporation shall
have the right to impose a thirty (30) calendar day "standstill" on the holders
of the Series B-2 Preferred during which such holders may NOT convert the Series
B-2 Preferred. The first Six Month Period shall commence on the Restriction
Commencement Date, and each subsequent Six Month Period shall commence at the
conclusion of the immediately preceding Six Month Period. The Corporation's
"standstill" right will be implemented, as follows:
(1) if any holder elects to convert, in order to
effect such conversion such holder first shall be required to notify the
Corporation in writing at of such holder's intent to convert and of the number
of shares of Series B-2 Preferred to be so converted; and
(2) the Corporation must respond by notice in
writing delivered to the holder at the holder's address on the Corporation's
stock register by hand or by facsimile, within two (2) business days after
receipt by the Corporation of the holder's notice of intention to convert, as to
whether the Corporation desires to impose the "standstill" (no response by the
Corporation means that the Corporation will permit the conversion into Common
Stock). If the Corporation gives timely notice of its desire to impose a
standstill, the standstill applies to each holder for thirty (30) days from the
date of notice. If the Corporation permits a conversion or does not respond and
the holder
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<PAGE>
does NOT convert the Series B-2 Preferred into Common Stock within such thirty
(30) day period, the Corporation's right to impose a standstill shall resume for
the next thirty (30) day period.
(b) MECHANICS OF CONVERSION. The rights of conversion under
SECTION 7(A) shall be exercised by a holder of Series B-2 Preferred by (i)
surrendering the certificates representing such shares, together with written
notice of such holder's election to convert such shares (the "Conversion
Notice"), and a proper assignment of such certificates to the Corporation. The
Conversion Notice shall state the names and addresses in which and to which the
certificates representing the Common Stock issuable or, if applicable, the other
shares, other securities, cash or other property issuable, deliverable or
payable, upon such conversion shall be issued, delivered or paid, as the case
may be. The date upon which the certificates representing the Series B-2
Preferred to be converted, the Conversion Notice and the proper assignment have
all been received by the Corporation is referred to herein as the "Conversion
Date." As promptly as practicable after the Conversion Date, the Corporation
shall issue and deliver or cause to be issued and delivered, as specified in the
Conversion Notice, certificates for the number of full shares of Common Stock
issuable upon such conversion together with any cash instead of fractional
shares as provided in Section 7(e). Such conversion shall be deemed to have
been effected immediately prior to the close of business on the Conversion Date,
and at such time the rights of the holder of the converted Series B-2 Preferred
shall cease and the person or persons in whose name or names any certificate or
certificates for Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the Common Stock
represented thereby. Notwithstanding anything contained herein to the contrary,
in the event of the liquidation, dissolution or winding up of the Corporation,
the holders of Series B-2 Preferred shall only be entitled to convert their
shares in accordance with the terms of this SECTION 7 at any time prior to the
earlier of the tenth day following the date on which such liquidation,
distribution or winding up was approved by the stockholders of the Corporation
and the date which is three days prior to the distribution of the proceeds from
such liquidation, dissolution or winding up of the Corporation.
(c) SUBDIVISION OR COMBINATION OF STOCK. In case the
Corporation shall at any time split or subdivide its outstanding Common Stock
into a greater number of shares, the applicable conversion ratios for the Series
B-2 Preferred set forth in SECTION 7(A) above and in effect immediately prior to
such subdivision shall be proportionately reduced, and, conversely, in case the
outstanding Common Stock shall be combined into a smaller number of shares, the
applicable conversion ratios in effect
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<PAGE>
immediately prior to such combination shall be proportionately increased.
(d) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION OR MERGER.
In the event of any capital reorganization or reclassification of the
outstanding capital stock of the Corporation not included in the immediately
preceding PARAGRAPH (C), or any consolidation of the Corporation with, or merger
of the Corporation with or into, another corporation or entity, or the sale of
all or substantially all of the assets of the Corporation (each of such events
being hereinafter referred to as an "Extraordinary Event"), where, in connection
with such Extraordinary Event, the holders of Common Stock will be entitled to
receive stock, securities, cash and/or other property with respect to or in
exchange for such Common Stock, then each share of Series B-2 Preferred shall,
at the effective time of such Extraordinary Event, be converted into, without
any action on the part of the holder thereof, such shares of stock, securities,
cash and/or other property as may be issuable or payable with respect to or in
exchange for the number of shares of Common Stock which would otherwise have
been issuable to the holder of such Series B-2 Preferred upon the conversion of
the Series B-2 Preferred Stock into shares of Common Stock of the Corporation.
(e) FRACTIONAL SHARES. No fractional shares of Common Stock (or
other shares or other securities) or scrip representing fractional shares shall
be issued upon conversion of any of the Series B-2 Preferred. Instead, the
Corporation shall pay cash in an amount equal to the fair market value of such
fractional share at the time of such conversion, as determined in good faith by
the Board of Directors of the Corporation.
(f) RESERVATION OF COMMON STOCK. The Corporation shall at all
times reserve and keep available and free of preemptive rights out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the Series B-2 Preferred, such number of its shares
of Common Stock (or other shares or other securities as may be required) as
shall from time to time be sufficient to effect the conversion of all
outstanding Series B-2 Preferred, and if at any time the number of authorized
but unissued shares of Common Stock (or such other shares or other securities)
shall not be sufficient to affect the conversion of all then outstanding Series
B-2 Preferred, the Corporation shall take such action as may be necessary to
increase its authorized but unissued shares of Common Stock (or other shares or
other securities) to such number of shares as shall be sufficient for such
purpose.
(g) COSTS OF CONVERSION. The Corporation shall pay all
documentary, stamp or other similar taxes attributable to the
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<PAGE>
issuance or delivery of Common Stock (or other shares or other securities) of
the Corporation upon conversion of any of the Series B-2 Preferred. However,
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of the Series B-2
Preferred in respect of which such shares are being issued.
8. REACQUIRED SHARES. Any shares of the Series B-2 Preferred
exchanged, redeemed, purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions or restrictions on issuance set forth
herein.
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<PAGE>
IN WITNESS WHEREOF, American United Global, Inc. has caused this
certificate to be signed by Robert M. Rubin, its President, and attested by its
Assistant Secretary this ___ day of January, 1997.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Robert M. Rubin
--------------------------------
Robert M. Rubin
President
- Page 9 - Certificate of Designation -
<PAGE>
EXHIBIT 10.6
CERTIFICATE OF DECREASE
(Pursuant to Section 151(g) of the Delaware General Corporation Law)
AMERICAN UNITED GLOBAL, INC.
AMERICAN UNITED GLOBAL, INC. (hereinafter called the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify:
1. The name of the corporation is AMERICAN UNITED GLOBAL, INC.
2. The designation of the 1,500,000 shares of stock of the
corporation to which this certificate relates is SERIES B PREFERRED STOCK filed
on August 2, 1996.
3. The voting powers, designations, preferences and the relative,
participating, optional or other rights and the qualifications, limitations and
restrictions of the said 1,500,00 shares of Series B stock were provided for in
a resolution adopted by the Board of Directors of the Corporation pursuant to
authority expressly vested in it by the provisions of the certificate of
incorporation of the Corporation. A certificate setting forth the said
resolution has been heretofore filed with the Secretary of State of the State of
Delaware pursuant to the provisions of Section 151(g) of the General Corporation
Law of the State of Delaware.
4. The Board of Directors of the corporation has adopted the
following resolution:
RESOLVED, that the outstanding series of Series B Preferred
Stock is hereby decreased from one million five hundred
thousand (1,500,000) shares to one million (1,000,000)
shares; and
FURTHER RESOLVED, that the proper officers of the corporation be
and hereby are authorized and directed to execute, deliver, and
file a certificate setting forth the foregoing resolution with
the Secretary of State of the State of Delaware pursuant to the
provisions of Section 151(g)
<PAGE>
of the General Corporation Law of the State of Delaware for the
purpose of effecting the foregoing resolutions.
Executed on this 8th day of January, 1997.
/s/ Robert M. Rubin
-------------------------------
Robert M. Rubin
President
