Exhibit 10.6


 


REGISTRATION
RIGHTS AGREEMENT


 


This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is dated as of March 22,
2006, by and among Vyyo Inc., a Delaware corporation (the “Company”), and the undersigned Investors
(each, a “Investor”, and collectively,
the “Investors”).


 


WHEREAS:


 


A. In connection with the Securities Purchase
Agreement (the “Securities Purchase Agreement”) by and among the parties hereto of even date herewith,
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to the Investors:  (i) shares of the Company’s common stock
(“Common Stock”), par value $0.0001 per share, (ii) convertible
notes of the Company (the “Convertible Notes”)
which will, among other things, be convertible into shares of Common Stock (the
“Conversion
Shares”) in
accordance with the terms of the Convertible Notes, (iii) Senior Secured
Notes, and (iv) Warrants (the “Warrants”)
which will be exercisable to purchase additional shares of Common Stock (as
exercised collectively, the “Warrant Shares”).


 


B. To induce the Investors to execute and
deliver the Securities Purchase Agreement, the Company has agreed to provide
the registration rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state
securities laws set forth in this Agreement.


 


NOW,
THEREFORE, in consideration of the mutual promises and the
mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
each of the Investors hereby agree as follows:


 


1. Definitions.


 


Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set
forth in the Securities Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:


 


(a) “Business Day” means any day other than
Saturday, Sunday or any other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.


 


(b) “Closing Date” shall have the meaning set
forth in the Securities Purchase Agreement.


 


(c) “Effective Date” means the date the Registration
Statement (as defined below) has been declared effective by the SEC.


 


(d) “Effectiveness Deadline” means the date which is one (1) year
after the after the Closing Date.


 

















 


(e) “Investor” means an Investor or any
transferee or assignee thereof to whom an Investor assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee
thereof to whom a transferee or assignee assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9.


 


(f) “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.


 


(g) “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the Securities Act and pursuant to Rule 415 and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC (as
defined below).


 


(h) “Registrable Securities” means (i) the Common
Shares, (ii) the Conversion Shares issued or issuable upon conversion of
the Convertible Notes, (iii) the Warrant Shares issued or issuable upon
exercise of the Warrants and (iv) any share capital of the Company issued
or issuable with respect to the Common Shares, Conversion Shares or the Warrant
Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
conversions of the Convertible Notes or exercises of the Warrants; provided
that, such Shares will not be deemed to be “Registrable Securities” if
such Shares are sold or sellable under Rule 144 without restriction of the
volume limitations of Rule 144(e).


 


(i) “Registration Statement” means a registration statement
or registration statements of the Company filed under the Securities Act
covering the Registrable Securities.


 


(j) “Required Holders” means the holders of at least a
majority of the outstanding Registrable Securities.


 


(k) “Rule 415” means Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous or
delayed basis.


 


(l) “SEC” means the United States Securities and Exchange Commission.


 


2. Registration.


 


(a) Mandatory Registration. The
Company shall prepare and, as soon as reasonably practicable, file with the SEC
the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities. In the event that Form S-3 is unavailable for such
a registration, the Company shall use such other form as is available for
such a registration on another appropriate form reasonably acceptable to
the Required Holders, subject to the provisions of Section 2(d). The
Registration Statement shall contain (except if otherwise directed by the
Required Holders) “Selling Shareholders” and “Plan of Distribution” sections to
be mutually agreed upon by the Company and the Required Holders. The Company
shall use reasonable commercial efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later
than the Effectiveness Deadline.


 


2

















 


(b) Legal Counsel. Subject to Section 5
hereof, the Required Holders shall have the right to select one legal counsel
to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Brown Raysman
Millstein Felder & Steiner LLP or such other counsel as thereafter
designated by the Required Holders. The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company’s obligations
under this Agreement.


 


(c) Ineligibility for Form S-3.
In the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form reasonably
acceptable to the Required Holders and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as either such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC or the Company is no longer obligated to maintain
a registration statement for the Registrable Securities pursuant to the terms
hereof.


 


3. Related Obligations.


 


At such time as the
Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a) or
2(c), the Company will use commercially reasonable efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the
following obligations:


 


(a) Subject to Section (c) below,
the Company shall submit to the SEC, within five (5) Business Days after
the Company learns that no review of a particular Registration Statement will
be made by the staff of the SEC or that the staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request. The Company shall
use commercially reasonable efforts to keep the Registration Statement
effective pursuant to Rule 415 at all times until the earlier of (i) the
date as of which the Investors may sell all of the Registrable Securities
covered by such Registration Statement without the volume limitations pursuant
to Rule 144(e) (or any successor thereto) promulgated under the
Securities Act, (ii) such time as the Registrable Securities have been
sold pursuant to the Registration Statement, or (iii) two years from the
effectiveness of the first Registration Statement filed hereunder; provided
however, that after such two years if counsel to an Investor (which may be
in-house counsel) advises an Investor in writing that such Investor is unable
to freely sell Registrable Securities pursuant to Rule 144(k), then the
Company shall maintain an effective Registration Statement for the Conversion
Shares until clause (i) or (ii) is satisfied, but not to exceed a
period of up to an additional two years (together, the “Registration Period”) if such Investor has
continuously held such Conversion Shares (or the Notes relating thereto two
years from the date hereof). The Company shall take commercially reasonable
efforts to ensure that each Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case
of prospectuses, in the light of the circumstances in which they were made) not
misleading.


 


3

















 


(b) The Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-Q, Form 10-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall have
incorporated such report by reference into such Registration Statement, if
applicable, or, if necessary, shall file such amendments or supplements with
the SEC on the same day on which the Exchange Act report is filed which created
the requirement for the Company to amend or supplement such Registration
Statement.


 


(c) The Company shall (A) permit
Legal Counsel to review and comment upon (i) a Registration Statement at
least five (5) Business Days prior to its filing with the SEC and (ii) all
amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K, and Reports on Form 10-Q and any similar or
successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto in a form to which Legal Counsel reasonably and timely
objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement
thereto without the prior approval of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall furnish to Legal Counsel, without
charge, (i) copies of any correspondence from the SEC or the staff of the
SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the
SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated
therein by reference, if requested by an Investor, and all exhibits and (iii) upon
the effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel in
performing the Company’s obligations pursuant to this Section.


 


(d) The Company shall furnish to each
Investor whose Registrable Securities are included in any Registration
Statement, without charge, (i) promptly after the same is prepared and
filed with the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of
any Registration Statement, ten (10) copies of the prospectus included in
such Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such
other documents, including copies of any preliminary or final prospectus, as
such Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Investor.


 


4

















 


(e) The Company shall use commercially
reasonable efforts to (i) register and qualify, unless an exemption from
registration and qualification applies, the resale by Investors of the
Registrable Securities covered by a Registration Statement under such other
securities or “blue sky” laws of all said jurisdictions in the United States
where Investors intend to sell Shares, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(e) or
where qualification necessitates undue time or expense, (y) subject itself to
general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.


 


(f) The Company shall notify Legal
Counsel and each Investor in writing of the happening of any event, as promptly
as practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall the Company deliver such notice to the
Investors without the Investors’ prior consent if such notice contains any
material, nonpublic information), and, subject to Section 3(r), promptly
prepare a supplement or amendment to such Registration Statement to correct
such untrue statement or omission, and deliver ten (10) copies of such
supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request).
The Company shall also promptly notify Legal Counsel and each Investor in
writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by
facsimile or e-mail on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, and (iii) of
the Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.


 


(g) The Company shall use commercially
reasonable efforts to prevent the issuance of any stop order or other suspension
of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify Legal Counsel
and each Investor who holds Registrable Securities being sold of the issuance
of such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.


 


5

















 


(h) The Company agrees that, if Goldman,
Sachs & Co. (“Goldman Sachs” and, together with any other affiliate of Goldman Sachs,
the “GS Entities” or the “GS Entity”) or any GS Entity could
reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11)
of the Securities Act, in connection with any registration of the Company’s
securities of any GS Entity pursuant to this Agreement, and any amendment or
supplement thereof (any such registration statement or amendment or supplement
a “GS Underwriter
Registration Statement”),
then the Company will cooperate with such GS Entity in allowing such GS Entity
to conduct customary “underwriter’s due diligence” with respect to the Company
and satisfy its obligations in respect thereof. In addition, at Goldman Sachs’
request, the Company will use commercially reasonable efforts to cause its
auditor or counsel to furnish to Goldman Sachs, on the first date of the
effectiveness of the GS Underwriter Registration Statement (i) a letter,
dated such date, from the Company’s independent certified public accountants in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to
Goldman Sachs, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such GS Underwriter Registration
Statement, in form, scope and substance as is customarily given in an
underwritten public offering, including, without limitation, a standard “10b-5”
statement for such offering, addressed to Goldman Sachs; such comfort letter,
legal opinion and/or 10b-5 statement shall be furnished to Goldman Sachs (i) at
no additional cost to Goldman Sachs if they are already provided to another
party in connection with a GS Underwriter Registration or (ii) at Goldman
Sachs’ expense if such comfort letter, legal opinion and/or 10b-5 statement are
not otherwise being provided in connection with a GS Underwriter Statement. The
Company will also permit legal counsel to Goldman Sachs to review and comment
upon any such GS Underwriter Registration Statement at least five business days
prior to its filing with the SEC and all amendments and supplements to any such
GS Underwriter Registration Statement within a reasonable number of days prior
to their filing with the SEC and not file any GS Underwriter Registration
Statement or amendment or supplement thereto in a form to which Goldman
Sachs’ legal counsel reasonably and timely objects.


 


(i) The Company shall use commercially
reasonable efforts either to (i) cause all of the Registrable Securities
covered by a Registration Statement to be listed on each securities exchange on
which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure
designation and quotation of all of the Registrable Securities covered by a
Registration Statement on the American Stock Exchange or (iii) if, despite
the Company’s commercially reasonable efforts to satisfy, the preceding clauses
(i) or (ii) the Company is unsuccessful in satisfying the preceding
clauses (i) or (ii), to secure the inclusion for quotation on The Nasdaq
SmallCap Market for such Registrable Securities and, without limiting the
generality of the foregoing, to use its best efforts to arrange for at least
two market makers to register with the National Association of Securities
Dealers, Inc. (“NASD”)
as such with respect to such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this Section 3(i).


 


(j) The Company shall cooperate with the
Investors who hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered and resold pursuant to a Registration Statement and enable such
certificates to be in


 


6

















 


such denominations or amounts, as the case may be, as the
Investors may reasonably request and registered in such names as the
Investors may request.


 


(k) If requested by an Investor, the Company
shall (i) as soon as practicable incorporate in a prospectus supplement or
post-effective amendment such information as an Investor reasonably requests to
be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to
be sold in such offering; (ii) as soon as practicable make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) as soon as practicable, supplement or
make amendments to any Registration Statement if reasonably requested by an
Investor holding any Registrable Securities.


 


(l) The Company shall use commercially
reasonable efforts to cause the Registrable Securities covered by a Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such
Registrable Securities.


 


(m) The Company shall make generally
available to its security holders as soon as practical, but not later than
ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the
provisions of Rule 158 under the Securities Act) covering a twelve-month
period beginning not later than the first day of the Company’s fiscal quarter
next following the effective date of a Registration Statement.


 


(n) The Company shall otherwise use
commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.


 


(o) Within two (2) Business Days after a
Registration Statement which covers Registrable Securities is declared
effective by the SEC, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC.


 


(p) Notwithstanding anything to the
contrary herein, at any time the Company may delay filing the Registration
Statement or amendment or supplement thereto or the disclosure of material,
non-public information concerning the Company, if, in the good faith opinion of
the Board of Directors, the disclosure of which at the time would be seriously
detrimental to the Company and its stockholders, (a “Grace Period”); provided, that the Company shall promptly (i) notify
the Investors in writing of the existence of material, non-public information
giving rise to a Grace Period (provided that in each notice the Company will
not disclose the content of such material, non-public information to the
Investors without the prior written consent of the Investors) and the date on
which the Grace Period will begin, and (ii) notify the Investors in
writing of the date on which the Grace Period ends; and, provided


 


7

















 


further, that the aggregate days in the Grace Periods shall not exceed
ninety (90) days during any three hundred sixty five (365) day period (an “Allowable Grace Period”). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) and
shall end on and include the later of the date the Investors receive the notice
referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with
respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended Shares of
Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has otherwise complied with the
requirements therein and entered into a contract for sale, and delivered a copy
of the prospectus included as part of the applicable Registration
Statement, prior to the Investor’s receipt of the notice of a Grace Period and
for which the Investor has not yet settled.


 


(q) If the Company proposes to
register any of its stock or other securities under the Securities Act in
connection with an underwritten public offering of such securities solely for
cash other than on Form S-8 or similar form, the Company shall, at such
time, promptly give each Investor notice of such registration. Upon the request
of each Investor given within twenty (20) days after such notice is given by
the Company, the Company shall, subject to the provisions of Section 3(r),
cause to be registered all of the Registrable Securities that each such
Investor has requested to be included in such registration.


 


(r) In the event of an underwritten
public offering, any participant in the offering shall be required to enter
into an underwriting agreement under the terms and conditions reasonably
negotiated between the Company and the managing underwriter. All Investors proposing
to distribute their securities through such underwriting shall (together with
the Company) enter into an underwriting agreement in customary form with
the managing underwriter selected for such underwriting by the Company. Notwithstanding
any other provision of Section 3 herein, if the managing underwriter
determines in its reasonable discretion that the success of the offering will
be jeopardized without a limitation on the number of shares to be underwritten,
the managing underwriter may in its reasonable discretion limit the
Registrable Securities or other securities to be distributed through such
underwriting pro rata, and if necessary, exclude all selling stockholders, to
the extent that other stockholders of the Company that have registration rights
have been similarly limited. If any Investor disapproves of the terms of any
such underwriting, such Investor may elect to withdraw therefrom by
written notice to the Company and the managing underwriter.


 


4. Obligations of the Investors.


 


(a) At least five (5) Business Days
prior to the first anticipated filing date of a Registration Statement, the
Company shall notify each Investor in writing of the information the Company
requires from each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with


 


8

















 


respect to the Registrable Securities of a particular Investor that
such Investor shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it as shall be reasonably required in
accordance with the Securities Act to effect the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.


 


(b) Each Investor, by such Investor’s
acceptance of the Registrable Securities, agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor’s election to exclude all of
such Investor’s Registrable Securities from such Registration Statement.


 


(c) Each Investor agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(g) or the first sentence of 3(f), such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or the first sentence of 3(f) or
receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended Shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f) and for which the Investor has not yet settled.


 


(d) Unless exempt from the prospectus
delivery requirements of the Securities Act, pursuant to Rule 172 of the
Securities Act, in connection with sales of Registrable Securities pursuant to
the Registration Statement, each Investor covenants and agrees that it will
comply with the prospectus delivery requirements Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.


 


5. Expenses of Registration.


 


Except as otherwise
provided herein, all reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
and fees and disbursements of counsel for the Company shall be paid by the
Company.


 


6. Indemnification.


 


In the event any
Registrable Securities are included in a Registration Statement under this
Agreement:


 


(a) To the fullest extent permitted by
law, the Company will, and hereby does, indemnify, hold harmless and defend
each Investor, the directors, officers, members, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor within


 


9

















 


the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys’ fees, amounts paid in settlement or expenses, joint or several,
(collectively, “Damages”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any of them may become
subject insofar as such Damages (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon:  (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act,
any other law, including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”). Subject to Section 6(c),
the Company shall reimburse the Indemnified Persons, promptly as such expenses
are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Damages. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a):  (i) shall not apply to a Damages by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(d); (ii) with respect to any preliminary
prospectus, shall not inure to the benefit of any such Person from whom the
Person asserting any such Damages purchased the Registrable Securities that are
the subject thereof (or to the benefit of any Person controlling such Person)
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or supplemented,
if such prospectus was timely made available by the Company pursuant to Section 3(d),
and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it or failed to deliver
the correct prospectus as required by the Securities Act and such correct
prospectus was timely made available pursuant to Section 3(d); (iii) shall
not be available to the extent such Damages is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available
by the Company, including a corrected prospectus, if such prospectus or
corrected prospectus was timely made available by the Company pursuant to Section 3(d);
and (iv) shall


 


10

















 


not apply to amounts paid in settlement of any Damages if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.


 


(b) In connection with any Registration
Statement in which an Investor is participating, each such Investor agrees to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration
Statement and each Person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act (each, an “Indemnified Party”), against any Damages or
Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Damages or
actions or proceedings whether commenced or threatened in respect thereof or
Indemnified Damages 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 to the Company by
such Investor expressly for use in connection with such Registration Statement
or any post-effective amendment thereof or any prospectus contained therein;
and, subject to Section 6(c), such Investor will reimburse any legal or
other expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Damages as promptly as such expenses are
incurred and are due and payable; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement
with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Damages if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however,
that the Investor shall be only liable under this Section 6(b), together
with any amount of contribution contained in Section 7, for only that
amount of a Damages or Indemnified Damages as does not exceed the net proceeds
to such Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented.


 


(c) Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 6 of notice of
the commencement of any action or proceeding (including any governmental action
or proceeding) involving a Damages, such Indemnified Person or Indemnified
Party shall, if a Damages in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel reasonably satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain


 


11

















 


its own counsel with the reasonable fees and expenses of not more than
one counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Company, subject to
the reasonable consent of the Investors holding at least a majority in interest
of the Registrable Securities included in the Registration Statement to which
the Damages relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Damages by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Damages.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying
party shall, without the prior written consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability inrespect to such Damages or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party
or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party
of any liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability
to defend such action.


 


(d) The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.


 


(e) The indemnity agreements contained
herein shall be in addition to (i) any cause of action or similar right of
the Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be
subject to pursuant to the law.


 


7. Contribution.


 


To the extent any
indemnification by an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that:  (i) no Person involved in the sale of
Registrable Securities which Person is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) in
connection with such sale shall be entitled to contribution from any Person


 


12

















 


involved in such
sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable
Securities, together with any amount under Section 6, shall be limited in
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities pursuant to such Registration Statement.


 


8. Reports Under the Exchange
Act.


 


With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without registration (“Rule 144”),
the Company agrees to:


 


(a) make and keep public information
available, as those terms are understood and defined in Rule 144;


 


(b) use reasonable, diligent efforts to
file with the SEC in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act so long as the
Company remains subject to such requirements and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and


 


(c) furnish to each Investor so long as
such Investor owns Registrable Securities, promptly upon written request, (i) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Investors to sell
such securities pursuant to Rule 144 without registration.


 


9. Assignment of Registration
Rights.


 


The rights under this
Agreement shall be automatically assignable by the Investors to any transferee
of all or any portion of at least 100,000 shares of such Investor’s Registrable
Securities if:  (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within ten (10) days
after such assignment; (ii) the Company is, within ten (10)) days after
such transfer or assignment, furnished with written notice of (a) the name
and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
and applicable state securities laws; (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein; and (v) such transfer
shall have been made in accordance with the applicable requirements of the
Securities Purchase Agreement and applicable laws.


 


10. Amendment of Registration
Rights.


 


Provisions of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver


 


13

















 


effected in
accordance with this Section 10 shall be binding upon each Investor and
the Company. No such amendment shall be effective to the extent that it applies
to less than all of the holders of the Registrable Securities. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.


 


11. Miscellaneous.


 


(a) A Person is deemed to be a holder of
Registrable Securities whenever such Person owns or is deemed to own of record
such Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable
Securities.


 


(b) Any notices, consents, waivers or
other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:


 


If to the Company:


 


Vyyo Inc.


4015 Miranda Avenue


First Floor


Palo Alto, CA 94304-1218


Telephone: 
(650) 319-4000


Facsimile:  (650) 319-4022


Attention:  General Counsel


 


With a copy to:


 


Skadden, Arps,
Slate, Meagher & Flom LLP


525 University
Avenue


Palo Alto, CA
94301


Telephone:  (650) 470-4500


Facsimile:  (650) 470-4570


Attention:  Gregory Smith, Esq.


 


If to an Investor, to its address and facsimile number
set forth on the Schedule of Investors attached hereto, with copies to
such Investor’s representatives as set forth on the Schedule of Investors,
or to such other address and/or facsimile number and/or to the attention of
such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or


 


14

















 


electronically generated by the sender’s facsimile
machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission or (C) provided by a courier or
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above,
respectively.


 


(c) Failure of any party to exercise any
right or remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver thereof.


 


(d) All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. If any provision of
this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(e) This Agreement, the other
Transaction Documents (as defined in the Securities Purchase Agreement) and the
instruments referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the other Transaction
Documents and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.


 


(f) Subject to the requirements of Section 9,
this Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.


 


15

















 


(g) The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


 


(h) This Agreement may be executed
in identical counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.


 


(i) Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.


 


(j) All consents and other determinations required
to be made by the Investors pursuant to this Agreement shall be made, unless
otherwise specified in this Agreement, by the Required Holders.


 


(k) The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent and no rules of strict construction will be applied against any
party.


 


(l) This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.


 


(m) The obligations of each Investor
hereunder are several and not joint with the obligations of any other Investor,
and no provision of this Agreement is intended to confer any obligations on any
Investor vis-à-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated herein.


 


16

















 


IN
WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  VYYO INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 

















 


IN
WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above.


 


	
   

  	
  INVESTORS:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: