EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of July 16,
2002, by and among Xxxx, Incorporated, a Minnesota corporation (the "Company"),
and Nidec America Corporation, a Delaware corporation (the "Purchaser").
The Company has agreed, on the terms and subject to the conditions set
forth in the Asset Purchase Agreement dated July 16, 2002 (the "Purchase
Agreement"), to issue and sell to the Purchaser shares (the "Preferred Shares")
of the Company's Series B Convertible Preferred Stock, no par value (the
"Preferred Stock"). The Preferred Shares are convertible pursuant to a
Certificate of Designation (the "Certificate of Designation") into shares (the
"Conversion Shares") of the Company's Common Stock, no par value (the "Common
Stock"). In addition, the Company, pursuant to the Certificate of Designation,
may pay dividends on the Preferred Stock in shares of the Company's Common Stock
("Dividend Shares"). As a condition to Closing the Purchase Agreement, the
Company has agreed to enter into an agreement to provide certain registration
rights under the Securities Act of 1933, as amended (the "Securities Act"), and
under applicable state securities laws with respect to the Conversion shares and
Dividend Shares. Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Purchase Agreement.
In consideration of the Purchaser entering into the Purchase Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following capitalized
terms have the meanings respectively indicated below:
(a) Applicable Period -- The period referred to in Section
2.1(a)(ii), or such shorter period as is necessary to complete the
distribution of the Registrable Securities covered thereby.
(b) Holder -- Any person owning or having the right to acquire,
through conversion of Preferred Shares, Registrable Securities, including
initially the Purchaser and thereafter any permitted assignee thereof.
(c) Exchange Act - The Securities Exchange Act of 1934, as
amended.
(d) Majority Holders-- Holders holding a majority of the
Registrable Securities included in the Registration Statement.
(e) Person - An individual, partnership, joint venture,
corporation, trust, limited liability company, limited liability
partnership, unincorporated organization or government or any department
or agency thereof.
(f) Prospectus -- The prospectus included in the Registration
Statement, including any preliminary prospectus, and any such Prospectus
as amended or supplemented by any prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement, and by all other amendments and
supplements to such Prospectus, including post-effective amendments, and
in each case including all exhibits thereto and all material incorporated
by reference therein.
(g) Registrable Securities - The Conversion Shares and any
Dividend Shares; provided that Registrable Securities shall cease to be
Registrable Securities: (i) when a Registration Statement with respect to
the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such Registration Statement or, if earlier, when the
Applicable Period shall have expired with respect to such securities;
(ii) if counsel to the Company reasonably determines they are eligible to
be distributed to the public pursuant to Rule 144(k) (or any successor
provision) under the Securities Act and, if requested by the Company's
transfer agent in connection with any sale by a Holder of Conversion
Shares or Dividend Shares, provide a legal opinion to the Company's
transfer agent to such effect; (iii) when new certificates for them not
bearing a legend restricting further transfer shall have been delivered
by the Company and subsequent disposition of them shall not require
registration or qualification of them under the Securities Act or any
similar state law then in force; (iv) when they shall have ceased to be
outstanding; or, (v) with respect to Conversion Shares issuable upon the
conversion of outstanding Preferred Shares, when such Preferred Shares
shall have been redeemed.
(h) Register, registered and registration - Refers to a
registration effected by preparing and filing a Registration Statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of the Registration Statement by the SEC;
(i) Registration Statement -- A "shelf"registration statement of
the Company pursuant to the provisions of Section 2.1(a) of this
Agreement which covers Registrable Securities and is filed on Form S-3
under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
(j) SEC-- The Securities and Exchange Commission.
(k) Securities Act-- The Securities Act of 1933, as amended.
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ARTICLE II
REGISTRATION RIGHTS
2.1 Registration.
(a) Shelf Registration.
(i) The Company shall, as expeditiously as reasonably
possible (but in any event on or before the thirtieth (30th) day following the
date hereof), use its reasonable best efforts to prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities and use its
reasonable best efforts to cause the Registration Statement to become and remain
effective during the Applicable Period to enable the sale of Registrable
Securities in accordance with the method or methods of distribution reasonably
requested by Purchaser and disclosed in the Registration Statement.
(ii) The Company agrees to use its reasonable best efforts
to keep the Registration Statement continuously effective for a period of six
(6) years following the date on which such Registration Statement is initially
declared effective, or such shorter period which will terminate (i) when all of
the Registrable Securities covered by the Registration Statement have been sold
pursuant to the Registration Statement or (ii) when all Conversion Shares and
all Dividend Shares shall cease to be Registrable Securities as provided in
Section 1.1(g) above.
(b) Registration Procedures. In connection with fulfilling its
responsibilities under the provisions of Section 2.1(a) above, the Company will,
as expeditiously as possible:
(i) prepare and file with the SEC such amendments and
supplements to such Registration Statement as may be necessary (A) to keep such
Registration Statement effective for the Applicable Period if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registration and (B) to enable
the Holders to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all securities covered by such Registration
Statement during the Applicable Period in accordance with the intended methods
of set forth in such Registration Statement;
(ii) furnish to each Holder such number of copies of the
Registration Statement, such number of copies of the Prospectus included in such
Registration Statement and such other documents as such Holder may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such Holder (including any Prospectus amended or
supplemented as set forth in Section 2.1(b)(iv));
(iii) use its reasonable best efforts to register or qualify
for sale the Registrable Securities covered by the Registration Statement under
state securities or "blue-sky laws", so-called, of such states as any Holder
shall reasonably request (to the extent the sale of the Registrable Securities
in such states is not exempt from registration), and do any and all other acts
and things which may be necessary or advisable to enable such Holder to
consummate the disposition in such states of such Registrable Securities owned
by such Holder; PROVIDED, that the registration obligations in this subparagraph
(iii) shall be subject to the following limitations and conditions: (A) the
Company shall have no obligation whatsoever under this subparagraph (iii)
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so long as the Common Stock is qualified as a National Market Security on the
NASDAQ Stock Market or is listed on a national securities exchange; (B) the
Company shall have no obligation to register or qualify Registrable Securities
in any states other than Connecticut, Minnesota and thirteen (13) other states
reasonably designated by the Majority Holders unless the Holder or Holders
seeking to register or qualify the Registrable Securities in additional states
agree in writing to pay all filing fees, legal fees and other costs and expenses
incurred in connection with such other registrations; (C) the Company shall not
be required for purposes of this subparagraph (iii) to (1) qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subparagraph (iii) be obligated to be
qualified, (2) subject itself to taxation in any such jurisdiction, or (3)
consent to general service of process in any such jurisdiction.
(iv) notify each Holder covered by such Registration
Statement: (i) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of such Registration Statement or
the initiation of any proceedings for that purpose, (ii) of receipt of
notification with respect to the suspension of the qualification of the
Registrable Securities for offer or sale in any jurisdiction or the initiation
of any proceeding for such purpose, (iii) at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the Company's
becoming aware that the Prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing (other than a fact relating to such Holder), and as promptly as
practicable use its reasonable best efforts to prepare a Prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an 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 not misleading in the light of the
circumstances then existing;
(v) otherwise use its reasonable best efforts (A) to comply
with federal and applicable state securities laws and all applicable rules and
regulations of the SEC; and (B) make generally available to its security holders
the earning statement referred to in Section 11(a) of the Securities Act which
covers a period of at least 12 months after the effective date of the
Registration Statement; provided that in fulfilling its obligations under this
clause (B) the Company may rely on the provisions of and definitions contained
in Rule 158 under the Securities Act;
(vi) use its reasonable best efforts (A) to secure the
listing of all such Registrable Securities covered by such registration
statement on the NASDAQ National Market System; and (B) if the Company elects to
list the Company's Common Stock on a national securities exchange, to cause all
Registrable Securities covered by the Registration Statement to be listed on
such national securities exchange.
(vii) provide a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effective date of such Registration Statement;
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(viii) make available for inspection by any Holder, and by
any attorney, accountant or other agent retained by any such Holder, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection with such Registration
Statement; provided, however, that all such persons shall agree to standard
confidentiality provisions regarding all such records, documents and
information;
(ix) permit counsel to the Purchaser to review the
Registration Statement and all amendments and supplements thereto, and any
comments made by the staff of the SEC and the Company's responses thereto, a
reasonable period of time prior to the filing thereof with the SEC.
Each Holder shall be deemed to have agreed by including Registrable Securities
in the Registration Statement that upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 2.1(b)(iv)
hereof, such Holder will forthwith discontinue such Holder's disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.1(b)(iv) hereof
and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the Applicable Period shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each Holder of any Registrable Securities covered
by such Registration Statement shall have received the copies of the
supplemented or amended prospectus contemplated by Section 2.1(b)(iv) hereof.
Each Holder shall provide to the Company in writing information concerning
itself required by law to be included in any Registration Statement registering
shares held by such Holder.
(c) Registration Expenses. The Company shall, whether or not the
Shelf Registration shall become effective, pay all expenses incident to its
performance of or compliance with this Section in connection with the Shelf
Registration, including without limitation all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws (subject to the
limitation set forth in Section 2.1(b)(iii) hereof), photocopy expenses,
messenger and delivery expenses, fees and disbursements of counsel for the
Company and all independent public accountants and other persons retained by the
Company; provided, however, that the Company shall bear no responsibility for
any fees or disbursements of any counsel for any Holder, any fees, commissions,
discounts or disbursements of any broker or underwriter. In all cases, any
allocation of Company personnel or other general overhead expenses of the
Company or other expenses for the preparation of financial statements or other
data normally prepared by the Company in the ordinary course of its business
shall be borne by the Company.
(d) Indemnification and Contribution. The Company hereby
indemnifies, to the extent permitted by law, each Holder, its officers,
directors, employees, agents and representatives, if any, and each Person, if
any, that "controls" such Holder within the meaning
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of Section 15 of the Securities Act, against all losses, claims, damages,
liabilities (or proceedings in respect thereof) and expenses (under the
Securities Act or common law or otherwise), joint or several, caused by any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities (or proceedings in
respect thereof) or expenses are caused by any untrue statement or alleged
untrue statement contained in or by any omission or alleged omission from
information respecting such Holder furnished in writing to the Company by such
Holder expressly for use therein. In connection with the Registration Statement
with respect to Registrable Securities held by a Holder, each such Holder will
furnish to the Company in writing such information respecting such Holder as
shall be reasonably requested by the Company for use in such Registration
Statement or Prospectus and will indemnify, to the extent permitted by law, the
Company, its officers, directors, employees, agents and representatives and each
Person, if any, that "controls" the Company within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses resulting from any untrue statement
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in the Registration Statement
or Prospectus or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement is contained in or such omission
is from information so furnished in writing by such Holder expressly for use
therein provided, that, in no event shall any indemnity under this Section
2.1(d) exceed the net purchase price of securities sold by such Holder under the
Registration Statement. Any Person entitled to indemnification under the
provisions of this Section 2.1(d) shall: (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, permit such indemnifying party to assume the defense of such
claim, with counsel reasonably satisfactory to the indemnified party; and if
such defense is so assumed, such indemnifying party shall not enter into any
settlement without the consent of the indemnified party and such indemnifying
party shall not be subject to any liability for any such settlement made without
its consent (which consent shall not be unreasonably withheld). In the event an
indemnifying party shall not be entitled, or elects not, to assume the defense
of a claim, such indemnifying party shall not be obligated to pay the fees and
expenses of more than one counsel or firm of counsel for all parties indemnified
by such indemnifying party in respect of such claim, unless in the reasonable
judgment of any such indemnified party a conflict of interest may exist between
such indemnified party and any other of such indemnified parties in respect to
such claim. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of a participating Holder, its officers,
directors or any Person, if any, who controls such Holder as aforesaid, and
shall survive the transfer of such securities by such Holder.
If for any reason the foregoing indemnity is unavailable, or is insufficient to
hold harmless an indemnified party, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of such
losses, claims, damages, liabilities or expenses (x) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other or (y) if the allocation
provided by clause (x) above is not permitted by applicable law or provides a
lesser sum to the indemnified
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party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations provided, however, that in
no case shall such Holder be responsible for any amount in excess of the net
purchase price of securities sold by it under the Registration Statement.
Notwithstanding the foregoing, 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.
2.2 Rule 144. The Company covenants that it will timely file the reports
required to be filed by it under the Securities Act or the Exchange Act
(including but not limited to the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(l) of Rule 144 adopted by the SEC
under the Securities Act) and the rules and regulations adopted by the SEC
thereunder (or, if the Company is not required to file such reports, will, upon
the request of any Holder, make publicly available such information), and will
take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by: (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any Holder, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
ARTICLE III
MISCELLANEOUS
3.1 Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Majority
Holders; PROVIDED, that no amendment, modification or supplement or waiver or
consent to the departure with respect to the provisions of Section 2.1(d) hereof
shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder of Registrable Securities.
3.2 Successors, Assigns and Transferees. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
representatives, administrators, heirs, successors and assigns, as applicable,
including, without limitation and without the need for an express assignment,
subsequent Holders. If any successor, assignee or transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities such
Person shall be entitled to receive the benefits hereof and shall be
conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
3.3 Notices. Any notice, demand or request required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an
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original to follow) on or before 5:00 p.m., eastern time, on a Business Day or,
if such day is not a Business Day, on the next succeeding Business Day, (ii) on
the next Business Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if deposited in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid),
addressed to the parties as follows:
If to the Company:
Xxxx Incorporated
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Purchaser:
Nidec America Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx,XX 00000
Attn: Xxxxxx X. Xxxxxx
Phone: 000-000-0000
Facsimile: 000-000-0000
E-mail: Xxx.Xxxxxx@Xxxxx.xxx
With a copy to:
Day, Xxxxx & Xxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Phone: 000-000-0000
Facsimile 617-345-4745
E-mail: xxxxxxxxx@xxx.xxx
and if to any other Holder, to such address as shall be designated by such
Holder in writing to the Company.
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3.4 Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
3.5 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause, phrase or sentence in
every other respect and of the remaining provisions, paragraphs, words, clauses,
phrases or sentences hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
3.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
3.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Minnesota, without regard
to the conflicts of laws rules thereof.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
hereby have executed this Registration Rights Agreement as of the date first
above written.
XXXX, INCORPORATED
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
NIDEC AMERICA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
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