1
REGISTRATION AGREEMENT
THIS AGREEMENT is made as of May 26, 1994, by and among INNOVA
CORPORATION, a Washington corporation (the "Company"), Bachow Investment
Partners III, L.P., a Delaware limited partnership ("BlP"), Paul S. Bachow
Co-Investment Fund, L.P., a Delaware Limited Partnership ("PSB Fund") and Paul
S. Bachow ("Bachow"). BIP, PSB Fund and Bachow are sometimes individually
referred to herein as a "B&A Investor" and collectively referred to as the "B&A
Investors."
The parties to this Agreement are parties to a certain Purchase
Agreement of even date herewith (the "Purchase Agreement"). In order to induce
the B&A Investors to enter into the Purchase Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the Closing under the Purchase
Agreement. Unless otherwise provided in this Agreement, capitalized terms used
herein shall have the meanings set forth in Section 8 hereof. The registration
rights granted hereby are intended to be of equal priority with the registration
rights granted on the date hereof pursuant to the Third Amendment to Preferred
Stock Purchase Agreement of even date herewith (such registration rights, "Equal
Registration Rights"). In consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Piggyback Registrations.
Whenever and as often as the Company proposes to register any of
its securities under the Securities Act or is required to register the
securities of any of its shareholders under the Securities Act, and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written
notice (in any event within three business days after its receipt of notice of
any exercise of demand registration rights other than under this Agreement) to
all holders of Registrable Securities ("Holders") of its intention to effect
such a registration and will include in such registration ali Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 30 days after the Holder's receipt of the Company's
notice. Notwithstanding the foregoing, the holders of Registrable Securities
will not have the right of inclusion in a Piggyback Registration that is not
underwritten if at the time of such registration (i) the Registrable Securities
can be sold to the public free of restriction pursuant to Rule 144(k) or (ii)
the Registrable Securities are registered under the Securities Act as provided
in this Agreement, free of any restriction on sale to the public.
1
2
(a) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters in good faith advise the Company in writing that
in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, the Company
will include in such registration (i) first, the securities the Company proposes
to sell, (ii) second, the Registrable Securities requested to be included in
such registration by the Holders and any other securities requested to be
included in such registration by holders pursuant to Equal Registration Rights,
pro rata among the holders with Equal Registration Rights ("Equal Holders") and
Holders on the basis of the number of shares owned by each such holder, and
(iii) third, other securities requested to be included in such registration by
holders whose rights to have their securities included in such registration are
granted after the date hereof.
(b) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters in good faith advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering, the Company will include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, the Registrable Securities requested to be included therein by the
Holders, and the securities requested to be included therein by other holders
pursuant to Equal Registration Rights, pro rata among the Equal Holders and the
Holders on the basis of the number of securities so requested to be included
therein owned by each such holder, and (ii) second, other securities requested
to be included in such registration by holders whose rights to have their
securities included in such registration are granted after the date hereof.
(c) Other Registrations. If a registration statement with respect
to Registrable Securities pursuant to this Section 1 or pursuant to Section 2
hereof has been declared effective by the SEC and was not subject to a stop
order, the Company shall not, during the four (4)-month period following the
effective date thereof, without the prior written consent of the B&A Investors,
file, cause to be effected or cooperate with any other Person who proposes to
file any registration statement with respect to any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, except with respect to the exercise of rights granted by the Company
prior to the date hereof entitling the holder of securities issued by the
Company to request registration of such securities under the Securities Act.
2
3
2. Demand Registration Rights.
At any time and from time to time after the initial registration
under the Securities Act of any securities issued by the Company (an "Initial
Public Offering"), the Holders of at least 25% of the Registrable Securities may
request registration under the Securities Act of all or part of the Registrable
Securities held by them on Form S-1 or any similar long-form registration
("Long-Form Registrations") or on Form S-2, Form S-3 or any similar short-form
registration ("Short-Form Registrations") if available, as provided in this
Section 2. Each request for a Demand Registration (as hereinafter defined) shall
specify the number of shares to be registered and the anticipated per share
price range for such offering. Within 15 days after receipt of any such request,
the Company will give written notice thereof to all other Holders, if any. The
Company will include in the registration statement filed by it all other
Registrable Securities specified in a written request for inclusion given by the
Holders thereof to the Company within 15 days after receipt of the Company's
notice. All registrations filed pursuant to this Section 2 are referred to
herein as "Demand Registrations".
(a) Long-Form Registrations. Holders will be entitled to request
two Long-Form Registrations hereunder. A registration will not count as one of
the permitted Long-Form Registrations unless (i) it is declared effective and no
stop order is issued or other action taken by or at the request of the SEC to
terminate or withdraw the offering made thereby and (ii) the Holders are able to
register and sell at least two-thirds (2/3) of the Registrable Securities
requested to be included in such registration.
(b) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 2(a), Holders will be entitled to
request an unlimited number of Short-Form Registrations hereunder; provided,
however, the Company will not be obligated to effect any Demand Registration
hereunder on Form S-2 or Form S-3 (or any equivalent successor form) if the
anticipated aggregate offering price of the Registrable Securities covered
thereby does not exceed $1,000,000. Demand Registrations will be Short-Form
Registrations whenever the Company is permitted to use any applicable short
form. As long as the Company is subject to the reporting requirements of the
Securities Exchange Act, the Company will use its best efforts to make
Short-Form Registrations on Form S-3 available for the sale of Registrable
Securities.
(c) Priority on Demand Registrations. Without the prior written
consent of Holders of a majority of Registrable Securities, the Company will not
include in any Demand Registration any securities held by Persons whose right to
be included therein was not granted on or prior to the date hereof. If a Demand
Registration is an underwritten offering and the managing underwriters advise
the Company in writing that, in their opinion, the number of Registrable
Securities and
3
4
other securities requested, and permitted hereunder, to be included in such
offering exceeds the number of shares which can be sold in an orderly manner in
such offering within a price range acceptable to the Holders of a majority of
the Registrable Securities requesting registration, the Company will include in
such registration only the number of shares which the underwriters determine can
be sold. In such event, Holders and Equal Holders requesting to have their
securities included in such registration pursuant to registration rights granted
on or prior to the date hereof will have priority in the offering over holders
of other securities whose rights to be included in such registration are granted
after the date hereof, and the number of shares of securities to be included in
the offering will be pro rated among Holders and Equal Holders requesting
inclusion, based on the ratio of the number of Registrable Securities or other
securities owned by each such holder to the number owned by all such holders
(i.e., the Holders and Equal Holders) seeking to sell shares in the offering.
Subsequently, such computation will be done if the number of shares which any
Holder or Equal Holder would be eligible to sell under the proration formula is
greater than the number of shares such Holder or Equal Holder proposes to sell.
(d) Restrictions on Long-Form Registrations. The Company will not
be obligated to effect any Demand Registration hereunder within the four
(4)-month period after the effective date of an Initial Public Offering or a
previous Demand Registration and, in the case of an Initial Public Offering, for
such longer period as may be requested by the underwriter managing the Initial
Public Offering, up to a maximum additional two (2) months. The Company may
postpone for up to four (4) months the filing or the effectiveness of a
registration statement for a Demand Registration if the Company and its
investment bankers certify, in writing, to the Holders that the filing or
effectiveness of such Demand Registration would reasonably be expected to have a
material adverse effect on any proposal or plan by the Company or any of its
Subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business), merger, other corporate reorganization, tender offer or
similar transaction which is material to the Company and the premature
disclosure of which would likely have a severe adverse effect on the
consummation thereof or the purchasing of which would render the Company unable
to comply with the requirement of the SEC Form on which the Demand Registration
has been or is to be filed.
3. Holdback Agreements.
(a) No holder shall effect any public sale or distribution of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 180-day period beginning on the effective date of any underwritten
registration which includes at least two-thirds (2/3) of the Registrable
Securities requested to be included in such registration (except as part of such
underwritten registration), unless the underwriters managing the registered
public offering otherwise agree; except, however, sales
4
5
pursuant to Rule 144 shall be prohibited only for a 90-day period following the
effective date of such an underwritten registration.
(b) The Company agrees to (i) not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 180-day period beginning on the effective date of any underwritten
registration pursuant to Section 1 (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor form) or
Section 2, unless the underwriters managing the registered public offering
otherwise agree, and (ii) use its best efforts to cause each holder of 5% or
more of the outstanding Common Stock (other than the B&A Investors), and each
officer or director of the Company who is a holder of Common Stock, or any
securities convertible into or exchangeable or exercisable for Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering), to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144 or Rule 144A) of any such
securities during the seven days prior to and during the 120-day period
beginning on the effective date of any underwritten registration pursuant to
Section 1 (except as part of such underwritten registration, if otherwise
permitted) or Section 2, unless the underwriters managing the registered public
offering otherwise agree.
4. Registration Procedures.
4.1 Procedures. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will:
(a) expeditiously prepare and file with the SEC a registration
statement with respect to such Registrable Securities and any amendments thereto
as may be necessitated in response to comments of the SEC staff or otherwise to
achieve compliance with the Securities Act, the securities laws of each
jurisdiction in which the securities are proposed to be offered and sold and all
rules and regulations adopted under any of the foregoing, including amendments
in response to requests or demands from the SEC staff or the staff of any state
securities agency having jurisdiction, and use its best efforts to cause such
registration statement to become effective as soon as possible after request
therefor by the Holders. Before filing a registration statement or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the Holders of a majority of the Registrable Securities covered by
such registration statement copies of all such documents proposed to be filed,
and any documents incorporated therein by reference, and cooperate fully with
the Holders and their counsel in drafting or revising any such documents;
5
6
(b) prepare and file with the SEC 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 until all
Registrable Securities have been sold in accordance with the intended method of
disposition, provided such undertakings expire nine (9) months after
effectiveness of such registration statement (except the undertakings shall not
expire as to a registration on Form S-3, on any successor form or on any other
form that can be updated by filing documents with the SEC pursuant to the
Securities Exchange Act or by incorporating such documents by reference into
such registration statement), 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;
(c) furnish to each seller of Registrable Securities such number
of copies of such registration statement, each amendment and supplement thereto,
the prospectus constituting a part of such registration statement (including
each preliminary prospectus), all exhibits to such registration statement and
such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller in
compliance with applicable law;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller;
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, will prepare all
necessary supplements or amendments to such prospectus to comply with all legal
requirements pertaining thereto;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASDAQ system;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into agreements (including, without limitation,
underwriting agreements in customary form, which may contain, among other
things,
6
7
representations, warranties, covenants, allocations of expense, closing
conditions, indemnification rights and other provisions which are conventional
or required by the underwriters under the circumstances), adopt any necessary
corporate resolutions necessary for the filing or completion of the offering
(including resolutions regarding other corporate matters) and obtain all
opinions of its counsel and comfort letters from its independent accountants in
customary form and covering such matters as are customarily covered therein as
may be required under the terms of the underwriters agreement or as the Holders,
the underwriters or any of their respective counsel may from time to time
request, and take all such other actions as the Holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to meet with, answer
all questions of and supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve (12) months beginning with the first day of the Company's first
full calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) permit any Holder who or which, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such Holder and its
counsel should be included, provided that such material shall be furnished under
such circumstances as shall cause it to be subject to the indemnification
provisions provided pursuant to Section 6(b) hereof;
(l) in the event of the issuance of any Stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
7
8
(m) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
(n) otherwise take all other actions necessary from time to time
as, in the reasonable opinion of the Holders and their counsel, may reasonably
be necessary or desirable to allow Holders thereof to effectuate the sale of
their Registrable Securities pursuant to such registration. All documents or
instruments prepared and/or filed and all actions taken or omitted by the
Company, its officers, directors, employees, agents, counsel, accountants or
others for or on its behalf pursuant to or in compliance with the provisions of
this Section 4.1 shall in all respects be satisfactory, in form and substance,
to the Holders whose Registrable Securities are proposed to be sold in any
offering contemplated hereby, the underwriters conducting the offering and their
respective counsel, accountants and other professional advisors.
If any such registration or comparable statement refers to any Holder by
name or otherwise as the holder of any securities of the Company and if, in its
sole and exclusive judgment, such Holder is or might be deemed to be a
controlling person of the Company, such Holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such Holder and presented to the Company in writing, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not, in
the opinion of such Holder's counsel experienced in the practice of securities
law, required by the Securities Act or any similar Federal statute then in
force, the deletion of the reference to such Holder; provided that with respect
to this clause (ii) such Holder shall furnish to the Company an opinion of
counsel to such effect, which opinion of counsel shall be reasonably
satisfactory to the Company.
4.2 Selection of Investment Bankers. In the case of any Piggyback
Registration which is an underwritten offering, the Company or Person requesting
registration may select the investment banker(s) and manager(s) to administer
the offering, provided that such investment banker(s) and manager(s) are
acceptable to the holders of a majority of Registrable Securities and securities
of Equal Holders participating in the Piggyback Registration. In the case of any
Demand Registration, the holders of a majority of Registrable Securities and
securities of Equal Holders participating in such registration shall have the
right, in consultation with the Company, to select the investment banker(s) and
manager(s) to administer the offering, subject to the approval of the Company
not unreasonably withheld, delayed or conditioned.
8
9
5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions referred to in
Section 5(b) hereof) and other Persons retained by the Company (all such
expenses being herein called "Registration Expenses"), will be borne by the
Company.
(b) Each Holder of Registrable Securities shall be responsible
for the underwriting discounts and commissions allocable to the sale of such
Holder's securities and for the fees and expenses of such Holder's own counsel,
accountants and other professional advisors.
6. Indemnification.
(a) The Company shall indemnify, to the extent permitted by law,
each Holder of Registrable Securities, its officers and directors and each
Person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by or
arising out of (i) any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any document incorporated into
any of the foregoing by reference; (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iii) written information which contains any material
misstatement or omission furnished by the Company to register the Registrable
Securities in any jurisdiction; (iv) the failure of the Company to file any
amendment or supplement to any registration statement or prospectus as required
by the Securities Act, the Securities Exchange Act or any other applicable law
or (v) any and all Registration Expenses; and the Company shall reimburse each
such Holder and other Person entitled to indemnification hereunder for any
reasonable legal fees or other expenses incurred in investigating or defending
any such loss, claim, liability, action or proceeding; provided that the Company
shall not be liable to any such indemnified Person hereunder if and to the
extent that any such loss, claim, damage, liability or expense is caused by or
contained in any information furnished in writing to the Company by such Holder
expressly for use therein or by such Holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such Holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to
9
10
the extent customarily provided in an underwriting agreement for a public
securities offering.
(b) In connection with any registration statement in which a
Holder is participating, each such Holder will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such Holder
for the specific purpose of including the same in the registration statement;
provided that the obligation to indemnify will be individual to each Holder and
will be limited to the net amount of proceeds received by such Holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification, provided that the failure of an indemnified
person to give notice as provided herein shall not relieve the indemnifying
party of its obligation under this Section 6, and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its written consent (but such consent will
not be unreasonably withheld). 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 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. If a conflict of interest exists between defendants in any such action,
the indemnifying party will be responsible for the fees and all other charges of
all counsel and experts employed, and all costs of presenting evidence, in such
action.
(d) The indemnification provided for under this Agreement is
cumulative with and in addition to, not exclusive or in lieu of, all other
rights and remedies which may be available to the B&A Investors or other Holders
hereunder,
10
11
under any other agreement with the Company, at law or in equity, and such right
of indemnification and other rights and remedies will remain in full force and
effect regardless of any investigation made by or on behalf of, or knowledge of
or attributable to, the indemnified party or any officer, director or
controlling Person of such indemnified party, and will survive the transfer of
securities and will be equally applicable to any other federal or state law or
regulation requiring registration or qualification of the Registrable Securities
other than the Securities Act and the Securities Exchange Act. The Company shall
also make such provisions as are reasonably requested by any indemnified party
for contribution to such party in the event the Company's indemnification is
unavailable for any reason.
7. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
8. Definitions.
"Common Stock" means the Company's Common Stock.
"Holder" means a Person who or which acquires or owns Registrable
Securities.
"Person" means an individual, proprietorship, partnership, joint
venture, corporation, limited liability company, association, trust,
unincorporated organization or other entity or enterprise in any form or a
government or any department, agency or political subdivision thereof.
"Registrable Securities" means (i) any Common Stock issued or
issuable upon the conversion of any Class B Preferred issued (a) pursuant to the
Convertible Debenture and Security Agreement, dated April 7, 1994, issued by the
Company in the original principal amount of $1,000,000, (b) pursuant to the
Purchase Agreement or in connection therewith, including, without limitation,
upon exercise of the Options, (ii) any Common Stock issued or issuable with
respect to the securities referred to in clause (i) of this sentence by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, and (iii) any
other shares of Common Stock held by the Persons holding the securities referred
to in clauses (i) or (ii) of this Section. As to any particular Registrable
Securities, such securities will cease to be Registrable Securities
11
12
when they have been distributed to the public pursuant to an offering registered
under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 under the Securities Act (or any
similar rule then in force). For purposes of this Agreement, a Person will be
deemed to be a holder of Registrable Securities whenever such Person has the
right to acquire, directly or indirectly, such Registrable Securities (upon
conversion or exercise in connection with a transfer of securities or otherwise,
but disregarding any restrictions or limitations upon the exercise of such
right), whether or not such acquisition has actually been effected.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force, or any successor legislation thereto.
"SEC" means the United States Securities and Exchange Commission
and any governmental body or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force, or any successor
legislation thereto.
"Class B Preferred" means the Company's shares of that separate
class designated as "Series B Convertible Preferred Stock".
Unless otherwise stated, other capitalized terms contained herein have
the meanings set forth in the Purchase Agreement.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the Holders in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company
will not cause or permit any stock split, combination of shares or other
transaction resulting in an adjustment or similar effect on Registrable
Securities which could reasonably be expected to adversely affect the ability of
the Holders to include Registrable Securities in a registration undertaken
pursuant to this Agreement or which could reasonably be expected to adversely
affect the marketability of such Registrable Securities in any such
registration.
(c) Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law or in equity. The parties hereto agree
and acknowledge
12
13
that money damages will not be an adequate remedy for any breach of the
provisions of this Agreement by the Company and that, in addition to the
recovery of damages or the pursuit of any other right or remedy available at
law, under the Purchase Agreement or otherwise, any Holder may in its sole
discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) and obtain specific performance and
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the Holders of a majority of Registrable
Securities.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors, assigns, heirs and legal
representatives of the parties hereto, whether so expressed or not. In addition,
whether or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of Holders or purchasers of Registrable
Securities are also for the benefit of, and enforceable by, any subsequent
Holder.
(f) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
(j) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be delivered personally to the recipient, sent to the
recipient by reputable overnight courier service (charges prepaid) or mailed to
the recipient by first class mail (postage prepaid). Such notices, demands and
other communications will
13
14
be sent to the Company and to the B&A Investors at their respective addresses
indicated below:
To the Company:
Innova Corporation
Gateway North, Building 2
3325 South 116th Street
Seattle, Washington 98168
Attention: Thomas S. Huseby,
President and Chief Executive Officer
To the B&A Investors:
c/o Bachow & Associates, Inc.
3 Bala Plaza East, Suite 502
Bala Cynwyd, PA 19004
Attention: Paul S. Bachow, President
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notices will be deemed to have been given hereunder when delivered personally,
three days after deposit in the U.S. Mail and one day after deposit with a
reputable overnight courier service.
(k) Gender, Number. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number (singular or plural) or gender (masculine, feminine or neuter), as the
context may require.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INNOVA CORPORATION
By: /s/ Thomas S. Huseby
----------------------------------
Name: Thomas S. Huseby
Title: President and CEO
14
15
BACHOW INVESTMENT PARTNERS, III, LP
By: Bala Equity Partners, L.P., its general
partner
By: /s/ Paul S. Bachow
----------------------------------
Name: Paul S. Bachow
Title: President
PAUL S. BACHOW CO-INVESTMENT
FUND, L.P.
By: Bachow Co-Investment L.P., its
general partner
By: /s/ Paul S. Bachow
----------------------------------
Name: Paul S. Bachow
Title: President
/s/ Paul S. Bachow
----------------------------------
PAUL S. BACHOW
15
16
AMENDMENT TO REGISTRATION AGREEMENT
This Amendment to Registration Agreement (the "Amendment") is entered
into as of April 26, 1996, by and among the undersigned for purposes of amending
the Registration Agreement (the "Agreement"), dated as of May 26, 1994, by and
among Innova Corporation (the "Company") and the undersigned in connection with
the addition of additional parties to the Registration Agreement in connection
with the sale of additional securities by the Company pursuant to the Series D
Preferred Stock Purchase Agreement dated as of April 26, 1996, with reference to
the following facts:
WHEREAS, the undersigned and the Company wish to grant to the Series D
Purchasers registration rights equivalent to those granted to the undersigned
pursuant to the Registration Agreement;
WHEREAS, pursuant to Section 9(d), the Agreement may be amended by the
Company and the Holders of the majority of the Registerable Securities;
WHEREAS, the undersigned constitute the Holders of a majority of the
Registerable Securities.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
conditions set forth in this Amendment, the undersigned hereby agree as follows:
10. The Registration Agreement is hereby amended to provide that the
term "Holders" shall include the Series D Investors. The term "Registerable
Securities" shall include the stock in the Company held by the Series D
Investors and the term "Equal Registration Rights" as used therein shall refer
to the rights granted to the Series D Investors pursuant to the Registration
Agreement.
11. This Amendment may be executed in one or more counterparts, each of
which may be deemed to be an original instrument, but all of which together
shall constitute but one instrument, and only one set of rights and obligations
shall arise therefrom.
12. Except as expressly amended hereby, the Registration Rights
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have entered into this Amendment as
of the date first set forth above.
16
17
INNOVA CORPORATION
By: /s/ John Hemingway
--------------------------------------
Its: CFO
-------------------------------------
BACHOW INVESTMENT PARTNERS III, L.P.
By: Bala Equity Partners, L.P., its general partner
By: Bala Equity, Inc., its general partner
By: /s/ Paul S. Bachow
------------------------------
Paul S. Bachow, President
PAUL S. BACHOW CO-INVESTMENT FUND, L.P.
By: Bachow Co-Investment, L.P., its general
partner
By: Bachow Co-Investment, Inc., its general
partner
By: /s/ Paul S. Bachow
------------------------------
Paul S. Bachow, President
/s/ Paul S. Bachow
------------------------------
PAUL S. BACHOW
17
18
AMENDMENT TO REGISTRATION AGREEMENT
This Amendment to Registration Agreement (the "Amendment") is entered
into as of April 30, 1997, by and among the undersigned for purposes of amending
the Registration Agreement (the "Agreement"), dated as of May 26, 1994, as
amended, by and among Innova Corporation (the "Company") and the undersigned in
connection with the addition of additional parties to the Registration Agreement
in connection with the sale of warrants to purchase Common Stock by the Company
pursuant to the Amendment to Loan Documents Between Greyrock Business Credit, a
Division of NationsCredit Corporation ("Warrant Holder"), and Innova dated as of
April 30, 1997, with reference to the following facts:
WHEREAS, the undersigned and the Company wish to grant to the Warrant
Holder registration rights equivalent to those granted to the undersigned
pursuant to the Registration Agreement;
WHEREAS, pursuant to Section 9(d), the Agreement may be amended by the
Company and the Holders of the majority of the Registerable Securities;
WHEREAS, the undersigned constitute the Holders of a majority of the
Registerable Securities.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
conditions set forth in this Amendment, the undersigned hereby agree as follows:
13. The Registration Agreement is hereby amended to provide that the
term "Holders" shall include the Warrant Holder. The term "Registerable
Securities" shall include the Common Stock issuable upon exercise of the Warrant
and the term "Equal Registration Rights" as used therein shall refer to the
rights granted to the Warrant Holder pursuant to the Registration Agreement.
14. This Amendment may be executed in one or more counterparts, each of
which may be deemed to be an original instrument, but all of which together
shall constitute but one instrument, and only one set of rights and obligations
shall arise therefrom.
15. Except as expressly amended hereby, the Registration Rights
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have entered into this Amendment as
of the date first set forth above.
18
19
INNOVA CORPORATION
By: /s/ John Hemingway
--------------------------------------
Its: CFO
-------------------------------------
BACHOW INVESTMENT PARTNERS III, L.P.
By: Bala Equity Partners, L.P., its general partner
By: Bala Equity, Inc., its general partner
By: /s/ Jay D. Seid
------------------------------
Jay D. Seid, Vice President
PAUL S. BACHOW CO-INVESTMENT FUND, L.P.
By: Bachow Co-Investment, L.P., its general
partner
By: Bachow Co-Investment, Inc., its general
partner
By: /s/ Jay D. Seid
------------------------------
Jay D. Seid, Vice President
/s/ Paul S. Bachow
------------------------------
PAUL S. BACHOW
WOODSIDE FUND
By V. Frank Mendicino
-------------------------------------
Its General Partner
-----------------------------------
19
20
WOODSIDE FUND II
By /s/ V. Frank Mendicino
-------------------------------------
Its General Partner
-----------------------------------
WOODSIDE FUND III
By /s/ V. Frank Mendicino
-------------------------------------
Its General Partner
-----------------------------------
UVCC FUND II
By: Arete Ventures, Inc.
By /s/ Bernard Tarr
------------------------------------
Its Vice President
-----------------------------------
UVCC II PARALLEL FUND, L.P.
By: Arete Ventures, Inc.
By /s/ Bernard Tarr
------------------------------------
Its Vice President
-----------------------------------
POMONA CAPITAL II, L.P.
By: Pomona Associates II, L.P.,
General Partner
By: Pomona Associates II, L.L.C.
General Partner
By /s/ Frances N. Janis
-------------------------------------
20
21
Its Vice President & Secretary
-----------------------------------
21