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EXHIBIT 10.3
REGISTRATION AGREEMENT
This Registration Agreement dated as of August 10, 1999 (this
"Agreement"), is made by and among (i) Xxxxxxxx.xxx Incorporated, a New York
corporation ("Parent"), (ii) ECI, Inc., a Massachusetts corporation ("ECI"),
(iii) Xxxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxx X. Xxxxxxx (collectively, the
"Principals"), and (iv) Xxxxxx X. Xxxxxxx as agent for the Principals (the
"Principals' Agent").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of June
18, 1999 by and among Parent, XxxxxxxXxxx.xxx Incorporated, a Delaware
corporation and subsidiary of Parent ("Merger Sub"), ECI, the Principals and the
Principals' Agent (the "Merger Agreement"), the parties thereto have agreed,
subject to the terms and conditions set forth therein, to merge ECI with and
into Merger Sub (the "Merger") and thereby to convert all shares of ECI common
stock then outstanding into (i) shares of Common Stock, $.001 par value per
share, of Parent ("Parent Common Stock") and (ii) shares of Series B Preferred
Stock, $.01 par value per share, of Parent ("Parent Series B Stock");
WHEREAS, the Principals and other ECI stockholders of record as of the
effective date of the Merger (collectively, the "Shareholders") desire to have
liquidity with respect to the shares of Parent Common Stock they receive in the
Merger or through conversion of Parent Series B Stock; and
WHEREAS, Parent is willing to file a registration statement in
accordance herewith;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties agree as follows:
1. Definitions of Certain Terms. As used herein, the following terms
shall have the following meanings:
"Exchange Act": the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC issued thereunder, as they may,
from time to time, be in effect.
"Holder": any Shareholder holding Registerable Shares.
"Registerable Shares": the shares of Parent Common Stock issued to the
Shareholders pursuant to the Merger and the shares of Parent Common
Stock issuable upon conversion of the Parent Series B Stock issued to
the Shareholders pursuant to the Merger.
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"SEC": the United States Securities and Exchange Commission, or any
governmental agency succeeding to its functions.
"Securities Act": the Securities Act of 1933, as amended, and the rules
and regulations of the SEC issued thereunder, as they may, from time to
time, be in effect.
Capitalized terms used, but not otherwise defined, in this Agreement shall have
the meanings given to them in the Merger Agreement.
2. Shelf Registration. Parent agrees that it shall cause to be filed a
registration statement (a "Shelf Registration") on Form S-3 or other applicable
form under the Securities Act for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 thereunder or any similar rule that may be
adopted by the SEC and permitting sales in ordinary course brokerage or dealer
transactions not involving any underwritten public offering covering all of the
Registerable Shares. Parent shall use commercially reasonable efforts (a) to
cause the Shelf Registration to be declared effective by the SEC and (b) subject
to Section 3 hereof, to keep the Shelf Registration continuously effective until
the earlier to occur of (i) the first anniversary of the Closing of the Merger
and (ii) the first date on which no Registerable Shares originally covered by
the Shelf Registration shall constitute Registerable Shares (such period during
which the Shelf Registration is effective is referred to herein as the
"Registration Period").
3. Registration Procedures. After Parent commences the registration of
the Registerable Shares pursuant to the Shelf Registration, Parent shall:
(a) furnish to a Holder such number of copies of the Shelf
Registration, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in the Shelf Registration (including
any preliminary prospectus) and such other documents as a Holder may reasonably
request in order to facilitate the disposition of the Registerable Shares owned
by the Holders;
(b) use commercially reasonable efforts to register or qualify such
Registerable Shares under such other securities or "blue sky" laws of such
jurisdictions as a Holder reasonably requests in writing and to do any and all
other acts and things that may be reasonably necessary or advisable to register
or qualify for sale in such jurisdictions the Registerable Shares owned by the
Holders; provided, however, that Parent shall not be required to qualify to do
business in any jurisdiction where it is not then so qualified; and
(c) use commercially reasonable efforts to cause all Registerable
Shares covered by the Shelf Registration to be listed on each securities
exchange or market, if any, on which similar securities issued by Parent are
then listed, provided, that the applicable listing requirements are satisfied.
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Each Holder understands and agrees (1) that any registration of the
Parent Shares may be delayed, if in the reasonable judgment of Parent, such
delay is desirable to permit the consummation by Parent of a financing including
a public offering by it and (2) that each Principal will sign any lock-up
agreement with respect to all its shares of Parent Common Stock which an
underwriter for a public offering of Parent may require (provided that such
lock-up shall be the same as that required to be signed by senior management of
Parent).
4. Stop Order; Supplement to the Prospectus; Parent's Xxxxxxx Xxxxxxx
Policies.
(a) Parent will notify the Holders promptly of (i) the issuance of
any stop order suspending the effectiveness of the Shelf Registration or the
institution or threatening of any proceeding for such purpose or (ii) the
receipt by Parent of any notification with respect to the suspension of the
qualification of the Registerable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Immediately upon
receipt of any such notice, the Holders shall cease to offer and sell any
Registerable Shares pursuant to the Shelf Registration in the jurisdiction to
which such stop order or suspension relates. Parent shall use commercially
reasonable efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if any such stop order is issued or
any such qualification is suspended, to obtain as soon as possible the
withdrawal or revocation thereof, and will notify the Holders at the earliest
practicable date of the date on which the Holders may offer and sell
Registerable Shares pursuant to the Shelf Registration.
(b) Parent will notify the Holders promptly of the occurrence of any
event or the existence of any state of facts that, in the judgment of Parent,
should be set forth in the prospectus used in connection with the Shelf
Registration (the "Prospectus"). Immediately upon receipt of such notice, the
Holders shall cease to offer or sell any Registerable Shares pursuant to such
Prospectus, cease to deliver or use such Prospectus and, if so requested by
Parent, return to Parent, at its expense, all copies (other than permanent file
copies) of such Prospectus. Parent will, as soon as the information becomes
available in a form such that it may be included in an amendment or supplement
to the Prospectus, use commercially reasonable efforts to amend or supplement
such Prospectus in order to set forth or reflect such event or state of facts;
it being understood that in the event that Parent determines in good faith that
the disclosure of such information would be seriously detrimental to Parent or
its shareholders, Parent shall be permitted to delay the filing of such an
amendment or supplement to the Prospectus for a period of time to extend no
longer than sixty (60) days. Parent will furnish copies of such amendment or
supplement to the Prospectus to the Holders.
(c) Each Holder agrees, if and for so long as the Holder is an
employee of Parent or any of Parent's Subsidiaries, to comply with any Parent
policy concerning the purchase and sale of securities of Parent.
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5. Information Concerning the Sellers.
(a) The obligations of Parent to take actions contemplated by
Sections 2, 3 and 4 hereof with respect to an offering of Registerable Shares
shall be subject to the condition that each Holder shall (i) conform to all
applicable requirements of the Securities Act and the Exchange Act with respect
to the offering and sale of securities and (ii) advise each underwriter, broker
or dealer through which any of such Registerable Shares are offered that such
Registerable Shares are part of a distribution that is subject to the prospectus
delivery requirements of the Securities Act, and such Holder shall furnish to
Parent in writing such information and furnish such documents as may be
reasonably required by Parent in the preparation of (A) the Prospectus (or any
amendment or supplement thereto) with respect to such offering and (B) any
qualification of such Registerable Shares under state securities or "blue sky"
laws pursuant to Section 3(b) hereof, and shall promptly notify Parent of the
occurrence, from the date on which such information or documents are furnished
to the date of the closing for the sale of such Registerable Shares, of any
event relating to such Holder that is required under the Securities Act to be
set forth in the Prospectus (or any amendment or supplement thereto).
(b) At the end of the Registration Period the Holders shall
discontinue sales of Registerable Shares pursuant to the Shelf Registration
after Parent has given notice to the Holders of its intention to remove from
registration the securities covered by the Registration Statement which remain
unsold, and the Holders shall notify Parent immediately upon receipt of such
notice from Parent of the number of shares of the Holders that are registered
but remain unsold.
6. Expenses of Registration. Parent shall pay all reasonable expenses
incident to its performance of or compliance with this Agreement and
registration of Registerable Shares in connection herewith, including (a) all
SEC, stock exchange or market and National Association of Securities Dealers,
Inc. registration and filing fees, (b) all fees and expenses incurred in
complying with securities or "blue sky" laws, (c) all printing, messenger and
delivery expenses, and (d) all fees and disbursements of Parent's independent
public accountants and counsel, (all of such expenses herein referred to as
"Registration Expenses"). The Registration Expenses shall not include any sales
or underwriting discounts, commissions or fees, (including expenses of counsel)
attributable to the sale of the Registerable Shares, which shall be borne by the
Holders.
7. Disclosure. With a view to making available registration on Form S-3
and the benefits of Rule 144 under the Securities Act, Parent agrees to:
(a) Make and keep current public information available within the
meaning of Rule 144(c).
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(b) File with the SEC in a timely manner all reports and other
documents and information required of Parent under the Exchange Act.
(c) Furnish to a Holder forthwith upon request a written statement
as to Parent's compliance with the reporting requirements of Rule 144 and the
Exchange Act, a copy of Parent's most recent annual and quarterly reports, and
such other reports, documents and other information in the possession of or
reasonably obtainable by Parent as the Holder may reasonably request in availing
itself of Rule 144.
8. Indemnification and Contribution.
(a) Parent agrees to indemnify, to the extent permitted by law and
subject to the terms of this Agreement, each Holder and each person, if any, who
controls such Holder (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in the Shelf Registration (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein in the light of
the circumstances under which they were made not misleading; provided, however,
that Parent shall not be liable to any Holder and each person, if any, who
controls such Holder (within the meaning of the Securities Act) to the extent
that any such loss, claim, damage, liability or expense arises out of, or is
based upon any untrue or alleged untrue statement, or any omission, if such
statement or omission shall have been made in reliance upon and in conformity
with information relating to such Holder or person furnished in writing to
Parent by any such Holder or person expressly for use in the preparation of the
Shelf Registration (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(b) In connection with the Shelf Registration, each Holder agrees to
indemnify, to the extent permitted by law and subject to the terms of this
Agreement, Parent, its directors, officers, employees and agents and each person
who controls Parent (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in the Shelf Registration (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein in the light of
the circumstances under which they were made not misleading, to the extent that
such untrue statement or omission was made in reliance upon and in conformity
with information furnished in writing to Parent by such Holder expressly for use
in the preparation of the Shelf Registration (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).
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(c) Each party entitled to indemnification under this Section 8
shall give notice to the party required to provide indemnification promptly
after such indemnified party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the indemnifying party to assume the
defense of any such claim or any litigation resulting therefrom; provided that
counsel for the indemnifying party, who shall conduct the defense of such claim
or litigation, shall be approved by the indemnified party (whose approval shall
not be unreasonably withheld or delayed); and provided, further, that the delay
or failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section 8, except
to the extent that the indemnifying party shall have been materially adversely
affected by such delay or failure. The indemnified party may participate in such
defense at such party's expense; provided, however, that the indemnifying party
shall pay such expense if the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such claim or litigation
resulting therefrom. No indemnified party shall consent to entry of any judgment
or settle any claim or litigation without the prior written consent of the
indemnifying party.
(d) If the indemnification provided for in this Section 8 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to therein as a
result of a judicial determination that such indemnification may not be enforced
in such case notwithstanding this Agreement, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expense, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Amendments and Supplements. This Agreement may not be amended,
modified or supplemented by the parties hereto in any manner, except by an
instrument in writing signed by Parent and the Principals' Agent.
10. No Waiver. The terms and conditions of this Agreement may be waived
only by a written instrument signed by (a) the Principals' Agent in the case
where a Principal or the Principals' Agent is waiving compliance and (b) by
Parent in the case where Parent is waiving
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compliance. The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of any
such provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non-compliance with this Agreement
shall be held to be a waiver of any other or subsequent breach or
non-compliance. The rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies that any party may otherwise have at law
or in equity.
11. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
12. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand, sent by facsimile
transmission with confirmation of receipt, sent via a reputable overnight
courier service with confirmation of receipt requested, or mailed by registered
or certified mail (postage prepaid and return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice), and shall be deemed given on the date on which
delivered by hand or otherwise on the date of receipt as confirmed:
To Parent:
Xxxxxxxx.xxx Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
With a copy to:
Xxxx Xxxxxxxx, Esq.
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
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To any Holder or the Principals' Agent:
Xxxxxx X. Xxxxxx
XxxxxxxXxxx.xxx Incorporated
c/o Xxxxxxxx.xxx Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Fax: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000-0000
Fax: (000) 000-0000
13. Construction of Agreement. A reference to a Section shall mean a
Section in this Agreement unless otherwise expressly stated. The titles and
headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a whole.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation."
14. Entire Agreement, Assignability, etc.. This Agreement and the
Merger Agreement and the documents and other agreements among the parties hereto
and thereto as contemplated by or referred to herein or therein constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder, except as otherwise expressly provided herein, and shall not be
assignable by operation of law or otherwise.
15. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Registration Agreement
to be executed as an agreement under seal as of the date first written above.
XXXXXXXX.XXX INCORPORATED
By: /s/ Xxxxx X. High
----------------------------
Xxxxx X. High
President
ECI, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, as the
Principals' Agent
