FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
September ___, 2000, by and between SI DIAMOND TECHNOLOGY, INC., a Texas
corporation (the "Company") and the subscriber (hereinafter referred to as
"Subscriber" or "Investor") to the Company's offering ("Offering") of its Common
Stock pursuant to the Regulation D Subscription Agreements between the Company
and the Subscriber (the "Subscription Agreements") executed as of September ___,
2000.
1. Definitions. For purposes of this Agreement:
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(a) The terms "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document with the Securities and Exchange Commission (the
"SEC") in compliance with the Securities Act of 1933, as amended (the "Act") and
pursuant to Rule 415 under the Act or any successor rule, and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means the shares of the
Company's Common Stock, together with any capital stock issued in replacement
of, in exchange for or otherwise in respect of such Common Stock (the "Common
Stock"), issued to Subscriber in the offering as identified in the Subscription
Agreements);
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any permitted assignee thereof;
(d) The terms "Offering" and "Closing" shall have the meanings
ascribed to them in the Subscription Agreements.
2. Voluntary Registration.
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(a) Notwithstanding any other obligation as identified in this
Agreement, the Company shall use its reasonable best efforts to voluntarily
register all of the Registrable Securities received by the Holder pursuant to
the Subscription Agreements (the "Holder's Shares") under the Act and any state
acts within forty-five (45) days from the date of this Agreement (the
"Post-Effective Amendment Registration Period") by filing a post-effective
amendment to the Company's Registration Statement on Form S-3 previously filed
with the SEC on July 17, 2000 (the "Registration Statement").
(b) The Holder whose Holder's Shares are to be included in any
registration statement or amended registration to be filed by the Company with
the SEC pursuant to the Act and this Agreement shall furnish the Company with
such appropriate information as the Company shall reasonably request in writing
concerning the Holder as is
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necessary for the Company to comply with the disclosure requirements of the Act,
and the rules and regulations promulgated thereunder. Following the effective
date of any such registration statement, the Company shall, upon the reasonable
request of the Holder, supply such number of prospectuses meeting the
requirements of the Act as shall be requested by such Holder to permit such
Holder to make a public offering of all the shares of such Holder included
therein. The Company shall exercise good faith efforts to qualify the Holder's
Shares for sale in such states as the Holder shall reasonably designate.
3. Obligations to Increase the Number of Available Shares. In the event
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that the number of shares available under the amendment to the Registration
Statement to be filed pursuant to Section 2 above is insufficient to cover all
of the Holder's Registrable Securities then outstanding, then:
(a) If the Company's efforts pursuant to the foregoing Section
2(a) result in less than seventy-five percent (75%) of the Holder's Shares being
registered under the Act, then and in that event, the Company shall use it's
best reasonable efforts to file a new registration statement so as to cover all
of the Holder's Shares then outstanding. The Company shall file such amendment
or new registration within sixty (60) days of the date that the Post-Effective
Amendment Registration Period under Section 2 expires; or
(b) If the Company's efforts pursuant to the foregoing clause
(a) result in seventy-five percent (75%) or more of the Holder's Shares being
registered under the Act, then and in that event, if the Company at any time
thereafter elects, or proposes, to register any of its authorized capital stock
under the Act with the SEC pursuant to which shares of the Company's Common
Stock owned by any shareholder of the Company may be registered, the Company
shall give prompt written notice (the "Registration Notice") to the Holder of
its intentions to register the Common Stock. Within fifteen (15) days after the
Registration Notice shall have been given to the Holder, the Holder shall give
written notice to the Company (the "Holder's Notice") stating the number of
Registrable Shares the Holder desires the Company to register (the Holder's
Shares"). The Company shall use its best efforts to register the Holder's Shares
under the Act and any state acts.
(c) Anything contained herein to the contrary notwithstanding,
the Company has the right to withdraw and discontinue registration of the
Holder's Shares at any time prior to the effective date of any such registration
statement if the registration of the Holder's Shares is withdrawn or
discontinued.
4. Obligations of the Company. Whenever required under this
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Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective.
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(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) With respect to any registration statement filed pursuant
to this Agreement, keep such registration statement effective until the earlier
of (i) the date upon which the Holders of Registrable Securities covered by such
registration statement shall have sold such Registrable Securities; or (ii) one
(1) year after the date of the Closing of the Offering.
(d) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(e) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders of the Registrable Securities covered by such registration statement,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(f) As promptly as practicable after becoming aware of such
event, notify each Holder of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request.
(g) Provide Holders with written notice of the date that a
registration statement registering the resale of the Registrable Securities is
declared effective by the SEC.
(h) Provide Holders and their representatives the opportunity
to conduct a reasonable due diligence inquiry of Company's pertinent financial
and other records and make available its officers, directors and employees for
questions regarding such information as it relates to information contained in
the registration statement, subject to all information received by the Holders
and their representatives being kept confidential.
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5. Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Agreement with
regard to each selling Holder that such selling Holders shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them, and the intended method of disposition of such securities as shall be
required to effect the registration of their Registrable Securities or to
determine that registration is not required pursuant to Rule 144 or other
applicable provision of the Act.
6. Expenses of Registration. All expenses, other than underwriting
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discounts and commissions and fees and expenses of counsel to the selling
Holders, incurred in connection with the registrations pursuant to Section 2,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, shall be borne by the Company.
7. Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers and directors of each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse each such Holder, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 7(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, officer, director, underwriter or
controlling person.
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(b) To the extent permitted by law, each selling Holder,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, any
underwriter and any other Holder selling securities in such registration
statement or any of its directors or officers or any person who controls such
Holder, against any losses, claims, damages, or liabilities (joint or several)
to which the Company or any such director, officer, controlling person, or
underwriter or controlling person, or other such Holder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company and any such director, officer, controlling person, underwriter or
controlling person, other Holder, officer, director, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 7(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this subsection
7(b) exceed the net purchase price of securities sold by such Holder under the
registration statement.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses of one such counsel to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7, but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 7.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any
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reason, the Company and each Holder of Registrable Securities agree to
contribute to the aggregate claims, losses, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Holders of Registrable Securities may be subject in such proportion as is
appropriate to reflect the relative fault of the Company and the Holders in
connection with the statements or omissions which resulted in such Losses;
provided, however, that in no case shall any Holder be responsible for any
amount in excess of the net purchase price of securities sold by it under the
registration statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by the Holders. The Company and the Holders agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls a holder of Registrable Securities
within the meaning of either the Act or the 1934 Act and each director, officer,
partner, employee and agent of a Holder shall have the same rights to
contribution as such holder, and each person who controls the Company within the
meaning of either the Act or the 1934 Act and each director of the Company, and
each officer of the Company who has signed the registration statement, shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The obligations of the Company and Holders under this
Section 7 shall survive the redemption and conversion, if any, of the Common
Stock, the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
8. Reports Under Securities Exchange Act of 1934. With a view to making
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available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of SEC
Rule 144, the Act and the 1934 Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and
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documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration.
9. Notices. All notices required or permitted under this Agreement
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shall be made in writing signed by the party making the same, shall specify the
section under this Agreement pursuant to which it is given, and shall be
addressed if to (i) the Company at: 3006 Longhorn Boulevard, Suite 107, Austin,
Texas 78758, Telephone No. (512) 339-5020, Facsimile No. (512) 248-620-5037, and
(ii) the Holders at their respective last address as the party shall have
furnished in writing as a new address to be entered on such register. Any
notice, except as otherwise provided in this Agreement, shall be made by fax and
shall be deemed given at the time of transmission of the facsimile.
10. Termination. This Agreement shall terminate on the earlier to occur
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of (a) the date that is one (1) year from the date of the Closing or (b) the
date the resale by Holders of all Registrable Securities described in any
registration statement filed pursuant to this Agreement is completed; but
without prejudice to (i) the parties' rights and obligations arising from
breaches of this Agreement occurring prior to such termination or (ii) other
indemnification obligations under this Agreement.
11. Assignment. No assignment, transfer or delegation, whether by
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operation of law or otherwise, of any rights or obligations under this Agreement
by the Company or any Holder, respectively, shall be made without the prior
written consent of the majority in interest of the Holders or the Company
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, a writing executed by such transferee
agreeing to be bound as a Holder by the terms of this Agreement); and provided
further that the Company may transfer its rights and obligations under this
Agreement to a purchaser of all or a substantial portion of its business if the
obligations of the Company under this Agreement are assumed in connection with
such transfer, either by merger or other operation of law (which may include
without limitation a transaction whereby the Registrable Shares are converted
into securities of the successor in interest) or by specific assumption executed
by the transferee.
12. Miscellaneous.
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(a) Governing Law. This Agreement shall be governed by
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and construed in accordance with the laws of the State of Texas without giving
effect to conflict of laws.
(b) Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
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(c) Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Registrable Shares, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereunder occurring, nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions of
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
(d) Counterparts. This Agreement may be executed in any number
of counterparts, each of which may be executed by less than all of the
Investors, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
(e) Severability. In the case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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The foregoing Registration Rights Agreement is hereby executed as of
the date first above written.
SI DIAMOND TECHNOLOGY, INC.
By: _______________________________
Name:______________________________
Title: ____________________________
SUBSCRIBER(S)
Subscriber's Name:
By:__________________________________
By:__________________________________
Address:
