REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of the
5th day of October, 1997 by and between Total Control Products, Inc., an
Illinois corporation ("TCP"), Computer Dynamics, Inc. ("Investor") and Xxxxxxxx
("Xxxxxxxx").
PRELIMINARY STATEMENT
Pursuant to the Asset Purchase Agreement dated as of the date hereof (the
"Investment Agreement") among Investor, TCP, Xxxxxxxx and various other parties,
as partial consideration for the consummation of the transaction contemplated by
the Investment Agreement (the "Acquisition"), Investor has received 932,039
shares of common stock, no par value per share, of TCP ("Common Stock").
Investor's agreement to receive such shares of Common Stock upon the
consummation of the Acquisition is on the condition that TCP agrees to certain
terms and conditions related to the registration of securities of TCP, as set
forth in this Agreement.
TERMS AND CONDITIONS
In consideration of the mutual covenants and agreements contained in this
Agreement and the Investment Agreement, and intending to be legally bound, the
parties hereto agree as follows:
SECTION 1.0. DEFINITIONS. As used in this Agreement, the following terms
have the meanings indicated below or in the referenced sections of this
Agreement. Additional terms are defined in the body of this Agreement.
"Common Stock": TCP's Common Stock, without par value, as the same may be
constituted from time to time.
"Exchange Act": The Securities Exchange Act of 1934, as amended from time
to time.
"Person": An individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, and a government entity or any department, agency,
or political subdivision thereof.
"Registrable Securities": The 932,039 shares of Common Stock to be
received by Investor pursuant to the Investment Agreement and any other shares
of Common Stock acquired by Investor or Xxxxxxxx after the date hereof which are
not registered under the Securities Act, including without limitation, any
additional shares of Common Stock received by Investor pursuant to the terms of
the Investment Agreement.
"Restricted Securities": The Registrable Securities, subject to the
provisions of SECTION 2.0.
"SEC": The United States Securities and Exchange Commission.
"Securities Act": The Securities Act of 1933, as amended from time to
time.
"Underwritten registration or underwritten offering": A registration in
which securities of TCP are sold pursuant to a firm commitment underwriting.
SECTION 2.0. SECURITIES SUBJECT TO THIS AGREEMENT. The securities
entitled to the benefits of this Agreement are those Registrable Securities that
are Restricted Securities. A Registrable Security ceases to be a Restricted
Security when (i) it is registered under the Securities Act and disposed of in
accordance with the registration statement covering it, (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the SEC under the Securities Act
("Rule 144"); or (iii) such Registerable Security is transferred to any Person,
other than to the Investor or to Xxxxxxxx.
SECTION 3.0. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If at any time TCP proposes to register any of
its securities under the Securities Act and Xxxxxxxx Xxxx, the President and
Chief Executive Officer of the Company, has elected to sell all or any portion
of his shares of Common Stock in such offering (a "Piggyback Registration"), TCP
shall notify Investor and Xxxxxxxx in writing (the "Piggyback Notice") of such
Piggyback Registration no later than thirty (30) days prior to the anticipated
filing date. Subject to the provisions of SECTION 3.0(b), TCP will include in
the Piggyback Registration up to the following aggregate number of Restricted
Securities owned beneficially by Xxxxxxxx and Investor: (a) the aggregate number
of Restricted Securities owned beneficially by Xxxxxxxx and Investor as of the
date of their receipt of the Piggyback Notice; multiplied by (b) the following
fraction, the numerator of which is equal to the number of shares of Common
Stock elected to be sold by Xxxxxxxx Xxxx in the Piggyback Registration, and the
denominator of which is equal to the aggregate number of shares of Common Stock
owned beneficially by Xxxxxxxx Xxxx as of the date of such election. Investor
and Xxxxxxxx must notify TCP in writing of their desire to include all or any
part of such Restricted Securities in the Piggyback Registration within fifteen
(15) days after their receipt of the Piggyback Notice. Xxxxxxxx and the
Investor may withdraw all or any part of the Registrable Securities from a
Piggyback Registration at any time before the printing of the preliminary
prospectus relating to the Piggyback Registration. All Persons whose securities
are included in the Piggyback Registration must sell their securities on the
same terms and conditions as apply to the securities being issued and sold by
TCP or, if TCP is not issuing and selling shares, the person who initiated the
Piggyback Registration.
(b) PRIORITY ON REGISTRATIONS. If a Piggyback Registration is an
underwritten registration on behalf of TCP and the managing underwriters give
TCP their written opinion that the total number or dollar amount of securities
requested to be included in the registration exceeds the number or dollar amount
of securities that can be sold, the aggregate number of Restricted Securities
elected to be included in the Piggyback Registration by Xxxxxxxx and/or the
Investor shall be reduced by the same percentage as the percentage reduction in
the number of shares of Common Stock that Xxxxxxxx Xxxx is allowed to sell in
such offering as compared to the number of shares of Common Stock that Xx. Xxxx
originally elected to sell in such offering.
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(c) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten offering, TCP will select the investment banker(s) and manager(s)
that will administer the offering and shall enter into a customary underwriting
agreement with the investment banker(s) and manager(s).
SECTION 4.0. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY SECURITIES HOLDERS. Each holder of
Registrable Securities agrees not to make any public sale or distribution of
equity securities of TCP (except as part of the underwritten registration),
including a sale pursuant to Rule 144 under the Securities Act, during the seven
days prior to and the 90 days after the effective date of any underwritten
registration of securities by TCP (or such longer period not to exceed 180 days
as the Underwriters may require) unless the managing underwriters agree
otherwise.
(b) RESTRICTIONS ON PUBLIC SALE BY TCP AND OTHERS. TCP agrees not to make
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities,
including a sale under Regulation D of the Securities Act or under any other
exemption of the Securities Act (except as part of the underwritten registration
or pursuant to registrations on Form S-8 or Form S-4 or any successor forms),
during the seven days prior to and the 90 days after the effective date of any
underwritten registration of securities by TCP unless the managing underwriters
agree otherwise.
SECTION 5.0. REGISTRATION PROCEDURES.
(a) Whenever Xxxxxxxx or the Investor request the inclusion of any
Registrable Securities in a registration statement to be filed pursuant to this
Agreement, TCP shall use its reasonable commercial efforts to register and to
permit the sale of the Registrable Securities in accordance with the intended
method of disposition.
(b) From time to time, TCP may require each seller of Registrable
Securities subject to the registration to furnish to TCP information regarding
the distribution of the securities subject to the registration.
(c) Each holder of Registrable Securities agrees by acquisition of those
securities that, upon receipt of any notice from TCP stating that the prospectus
used to distribute securities contains an untrue statement of material fact or
omits to state any material fact necessary to make the statements therein not
misleading, the holder will discontinue disposition of Registrable Securities
until the holder receives copies of the supplemented or amended prospectus which
corrects such misstatement or omission. In addition, if TCP requests, the
holder will deliver to TCP (at TCP's expense) all copies, other than permanent
file copies then in the holder's possession, of the prospectus covering the
Registrable Securities current at the time of receipt of the notice.
SECTION 6.0. REGISTRATION EXPENSES. All Registration Expenses incident
to TCP's performance of or compliance with this Agreement shall be paid by TCP.
As used in this Agreement, the term "Registration Expenses" includes without
limitation all registration filing fees,
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professional fees, and other expenses of compliance with federal, state, and
other securities laws; printing expenses; fees and disbursements of counsel for
TCP; and fees and disbursements of all independent certified public accountants.
The term "Registration Expenses" does not include any discounts and commissions
of underwriters payable with respect to the sale of shares of Restricted
Securities, which expenses shall be borne by the holder of shares of
Registerable Securities sold.
SECTION 7.0. INDEMNIFICATION.
(a) INDEMNIFICATION BY TCP. To the full extent permitted by law, TCP
agrees to indemnify Xxxxxxxx and the Investor against all losses, claims,
damages, liabilities, and expenses caused by any untrue or allegedly untrue
statement of material fact contained in any registration statement, prospectus,
or preliminary prospectus or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except to the extent the untrue statement or omission
resulted from information that Xxxxxxxx or the Investor furnished in writing to
TCP expressly for use therein or by Xxxxxxxx'x and the Investor's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto to any purchaser after TCP has furnished Xxxxxxxx or the
Investor with a sufficient number of copies of the relevant documents.
(b) INDEMNIFICATION BY HOLDERS OF SECURITIES. In connection with any
registration statement, to the extent that Xxxxxxxx or the Investor participate
in such registration, Xxxxxxxx and the Investor will furnish to TCP in writing
such information and affidavits as TCP reasonably requests for use in connection
with any registration statement or prospectus and Xxxxxxxx and the Investor
agree, jointly and severally, to indemnify, to the extent permitted by law, TCP,
its directors and officers, and each Person who controls TCP (within the meaning
of the Securities Act and the Exchange Act) against any losses, claims, damages,
liabilities, and expenses resulting from any untrue or allegedly 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 any
amendment thereof or supplement thereto necessary to make the statements therein
not misleading, but only to the extent that the untrue statement or omission is
contained in or omitted from any information or affidavit Xxxxxxxx or the
Investor furnished in writing, or resulting from Xxxxxxxx'x or the Investor's
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto to any purchaser after TCP has furnished
Xxxxxxxx or the Investor with a sufficient number of copies of the relevant
documents.
(c) INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification
under this Agreement will (1) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (2) unless in the
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party does not
assume the defense, the indemnifying party will not be liable for any settlement
made without its consent (but that consent may not be unreasonably withheld).
No indemnifying party will consent to entry of any judgment or will enter into
any settlement that does not include as an unconditional term the claimant's or
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plaintiff's release of the indemnified party from all liability concerning the
claim or litigation. An indemnifying party who is not entitled to or elects not
to assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by the
indemnifying party with respect to the claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between the
indemnified party and any other indemnified party with respect to the claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of additional counsel.
SECTION 9.0. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration without (a) agreeing to sell
securities on the basis provided in any properly approved underwriting
arrangements and (b) completing and executing all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents required by
the underwriting arrangements.
SECTION 10.0. MISCELLANEOUS.
(a) AMENDMENT. This Agreement may be amended or modified only by a
written agreement executed by TCP, Xxxxxxxx and the Investor.
(b) ATTORNEYS' FEES. In any legal action or proceeding brought to enforce
any provision of this Agreement, the prevailing party shall be entitled to
recover all reasonable expenses, charges, court costs, and attorneys' fees in
addition to any other available remedy at law or in equity.
(c) CAPTIONS. The captions of the sections and subsections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any provision of this Agreement.
(d) COOPERATION. The parties agree that after execution of this Agreement
they will from time to time, upon the request of any other party and without
further consideration, execute, acknowledge, and deliver in proper form any
further instruments and take such other action as any other party may reasonably
require to carry out effectively the intent of this Agreement.
(e) COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
(f) ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter of this Agreement. There are no
promises, covenants, or undertakings other than those expressly set forth or
provided for in this Agreement.
(g) NOTICES. All notices, requests, demands, or other communications that
are required or may be given pursuant to the terms of this Agreement shall be in
writing and delivery shall be deemed sufficient in all respects and to have been
duly given on the date of service if delivered personally to the party to whom
notice is to be given, or on the third day after mailing if mailed by
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first class mail - return receipt requested, postage prepaid, and properly
addressed to the addresses set forth in the Investment Agreement or to such
other addresses as the respective parties hereto shall from time to time
designate to the other(s) in writing.
(h) SPECIFIC PERFORMANCE. Each of the parties agrees that damages for a
breach of or default under this Agreement would be inadequate and that in
addition to all other remedies available at law or in equity the parties and
their successors and assigns shall be entitled to specific performance or
injunctive relief, or both, in the event of a breach or a threatened breach of
this Agreement.
(i) VALIDITY OF PROVISIONS. Should any part of this Agreement for any
reason be declared by any court of competent jurisdiction to be invalid, that
decision shall not affect the validity of the remaining portion, which shall
continue in full force and effect as if this Agreement had been executed with
the invalid portion eliminated, it being the intent of the parties that they
would have executed the remaining portion of the Agreement without including any
part or portion that may for any reason be declared invalid.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
TOTAL CONTROL PRODUCTS, INC.
By /s/Nic Gihl
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Title:President
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COMPUTER DYNAMICS, INC.
By /s/Xxxx Xxxxxxxx
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Title:President
/s/Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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