EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
January 2, 1997, by and among CTI Group (Holdings) Inc., a Delaware corporation
("Company"), and the Holders.
2. Definitions. For purposes of this Agreement:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933 (the "Act") and,
to the extent possible, in compliance with Rule 415 under the Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means the (i) 795,000 shares of
the Company's common stock, $.01 par value per share (the "Common Stock")
issuable pursuant to the terms of the Agreement and Plan of Merger, dated as of
the 16th day of December, 1996, by and among CTI Group (Holdings) Inc., CGI
Acquisition Corp., Soft-Com Inc. and Xxxx Xxxxx (the "Merger"); and (ii) 90,000
shares of Common Stock issuable upon exercise of that certain option dated the
date hereof to be issued to North American Venture Capital Fund.
(c) The term "Holders" means all of the persons who acquire Registrable
Securities pursuant to the Merger or any permitted assignee thereof.
3. Demand Registration. (a) If, on or after that date which is three years from
the date hereof, holders of in excess of twenty-five percent (25%) of the
Registrable Securities which at such time ("Initiating Holders"), have not been
registered for resale pursuant to an effective registration statement with the
U.S. Securities and Exchange Commission ("SEC"), provide the Company with
written notice requesting that the Company cause a registration statement with
respect to such Registrable Securities to be filed with the SEC, the Company
shall promptly give written notice of such request to holders of all such
Registrable Securities. The Company shall use its best efforts to cause all the
shares of Common Stock held by the Initiating Holders and all other holders who
notify the Company in writing within thirty (30) days of receipt of such notice
of their election to include such shares of Registrable Securities in such
registration statement, to be registered under the Act.
(b) The Company shall not be required to file and cause to be effective
more than one (1) registration statement pursuant to Section 2(a).
4. Piggyback Registration. If (but without any obligation to do so) the Company
proposes to register (including, for this purpose, a registration effected by
the Company for shareholders other than the Holders) any of its Common Stock
under the Act in connection with the public offering of such securities (other
than a registration on Form S-8 or on Form S-4), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder within thirty (30) days after mailing such notice
by the Company, which request shall state the intended method of disposition of
such shares of such Holder, the Company shall cause to
be registered under the Act all of the Registrable Securities that each such
Holder has requested to be registered (a "Piggyback Registration").
5. Limitation on Obligation to Register.
(a) In the case of a Piggyback Registration on an underwritten public
offering by the Company, if the managing underwriter determines and advises in
writing that the inclusion in the registration statement of (i) all Registrable
Securities proposed to be included by the Holders pursuant to Section 3 hereof
and (ii) all other securities of the Company proposed to be included in such
registration statement for the account of persons other than the Company would
interfere with the successful marketing of the securities proposed to be
registered by the Company, then Registrable Securities may be excluded from such
registration statement only to the extent that the underwriter shall require.
Any such exclusion of Registrable Securities shall be pro-rata among the Holders
who had requested Piggyback Registration and the other persons (the "Other
Holders") for the account of whom securities are being included in such
registration statement, other than the Company (such securities held by Other
Holders being hereinafter referred to as "Other Securities"), in the proportion
that the number of Registrable Securities or Other Securities which each such
Holder or Other Holder seeks to register bears to the total number of
Registrable Securities and Other Securities sought to be included by all Holders
and Other Holders; provided, however, that Registrable Securities may be
excluded from such registration statement only to the extent that the Company
has first excluded all outstanding securities held by persons who are not
entitled to inclusion of such securities in such registration statement or are
not entitled to inclusion on a pro-rata basis with the Registrable Securities.
(b) Notwithstanding anything to the contrary herein, the Company shall
have the right (i) to defer the initial filing or request for acceleration of
effectiveness of any Piggyback Registration or (ii) after effectiveness, to
suspend effectiveness of any such registration statement, if, in the good faith
judgment of the board of directors of the Company and upon the advice of counsel
to the Company, such delay in filing or requesting acceleration of effectiveness
or such suspension of effectiveness is necessary in light of the existence of
material non-public information (financial or otherwise) concerning the Company,
disclosure of which at the time is not, in the opinion of the board of directors
of the Company upon the advice of counsel (A) otherwise required and (B) in the
best interests of the Company.
(c) Any "piggyback" registration rights granted by the Company to
holders of its securities after the date hereof, shall provide that such
holders' securities shall be included in any registration statement registering
Registrable Securities on a pari passu basis with all Registrable Securities
therein.
6. Obligations of the Company. Whenever required under this Agreement to effect
the registration of any Registrable Securities, the Company shall:
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(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use reasonable efforts to cause such
registration statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to keep the registration statement
effective and comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the holders of
the Registrable Securities covered by such registration statement; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (a) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(d), (b)
subject itself to general taxation in any such jurisdiction, (c) file a general
consent to service of process in any such jurisdiction, (d) provide any
undertakings that cause the Company undue expense or burden, or (e) make any
change in its charter or bylaws, which in each case the Board of Directors of
the Company determines to be contrary to the best interests of the Company and
its stockholders.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder who holds Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits 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.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
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7. Furnish Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities or to determine that registration is not required
pursuant to Rule 144 or other applicable provision of the Act.
8. Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to the registrations pursuant to Section 3
for each Holder, including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto, but excluding fees and expenses of counsel for the Holders and
underwriting discounts and commissions relating to Registrable Securities.
9. Indemnification. In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each "Holder Indemnified Person" (defined for purposes of this Section
8 as each Holder, the shareholders, parties, employees, agents, officers and
directors of each Holder acting in their capacity as such, any underwriter (as
defined in the Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the Securities Exchange
Act of 1934, as amended (the "1934 Act")), against any losses, claims, damages,
expenses, or liabilities (joint or several) ("Losses") to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse each such Holder Indemnified Person for any legal
or other expenses reasonably incurred by him, her or it in connection with
investigating or defending any such Loss or action; provided, however, that the
indemnity agreement contained in this subsection 8(a) shall not apply to amounts
paid in settlement of any such Loss or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such Loss or
action to the extent that it arises out of or is based upon a Violation which
occurs (i) in reliance upon and in conformity with information furnished
expressly for use in connection with such registration by any such Holder
Indemnified Person, or (ii) the failure of such Holder Indemnified Person to
deliver a copy of the registration statement or the prospectus, or any
amendments or supplements thereto, after the Company or underwriters has
furnished such person with a sufficient number of copies of the same.
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(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the "Company Indemnified Persons" (defined for the purpose of
this Section 8 as the Company, each of its directors in their capacity as such,
each of its officers who have signed the registration statement in their
capacity as such, each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act, any underwriter and any other
stockholder selling securities in such registration statement), against any
Losses (joint or several) to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such Losses (or actions in
respect thereof) arise out of or are based upon any Violation, in each case to
the extent that such Violation occurs in reliance upon and in conformity with
information furnished by such Holder expressly for use in connection with such
registration or actions taken by an Holder or its directors, officers, employees
or agents; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company and any such Company Indemnified Person in
connection with investigating or defending any such Losses or action; provided,
however, that the indemnity agreement contained in this subsection 8(b) shall
not apply to amounts paid in settlement of any such Losses or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, however, that, in no event shall
any indemnity under this subsection 8(b) exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 8, 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
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 8.
(d) To the extent any indemnification by an indemnifying party pursuant
to this Section 8 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 hereunder to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in this Section 8, (ii) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation, and (iii) contribution
(together with any indemnification or other obligations under this Agreement) by
any seller of
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Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities.
(e) The obligations of the Company and Holders under this Section 8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
10. Amendment of Registration Rights. Any 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 holders of a 75% of the Registrable
Securities. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder, each future Holder, and the Company.
11. Notices. All notices required or permitted under this Agreement shall be
made in writing signed by the party making the same, shall specify the section
under this Agreement pursuant to which it is given, by certified, registered,
overnight or regular mail and shall be addressed if to (i) the Company at Chief
Financial Officer, CTI Group (Holdings) Inc., 000 Xxxxx Xxxxxxx Xxxx, Xxxxxx
Xxxxx, XX 00000, Telecopy No. (000) 000-0000 and (ii) the Holders at their
respective last address as the party shall have furnished in writing as a new
address to be entered on such register.
12. Termination. This Agreement shall terminate on the later to occur of (a) the
date that is five years from the date of this Agreement and (b) the date any
distribution of Registrable Securities described in a registration statement
filed pursuant to this Agreement is completed; but without prejudice to (i) the
parties' rights and obligations arising from breaches of this Agreement
occurring prior to such termination or (ii) other indemnification obligations
under this Agreement.
13. Assignment. No assignment, transfer or delegation, whether by operation of
law or otherwise, of any rights or obligations under this Agreement by the
Company or any Holder, respectively, shall be made without the prior written
consent of the majority in interest of the Holders and the Company,
respectively; provided, however, that the rights of an Holder may be transferred
to a subsequent holder of the Holder's Registrable Securities including, without
limitation, a partner of an Holder (provided such transferee shall provide to
the Company, together with or prior to such transferee's request to have such
Registrable Securities included in a Piggyback Registration, a writing executed
by such transferee agreeing to be bound as an Holder by the terms of this
Agreement); and provided, further, however, that the Company may transfer its
rights and obligations under this Agreement to a purchaser of all or a
substantial portion of its business if the obligations of the Company under this
Agreement are assumed in connection with such transfer, either by merger or
other operation of law (which may include, without limitation, a transaction
whereby the Registrable Securities are converted into securities of the
successor in interest) or by specific assumption executed by the transferee.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the 1934 Act, which matters shall be construed and interpreted
in accordance with such laws. Any action brought to enforce, or otherwise
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arising out of, this Agreement shall be heard and determined only in either a
federal or state court sitting in the city and county of Philadelphia in the
Commonwealth of Pennsylvania.
14. Third Party Beneficiaries. It is the intent of the parties that the
provisions of this Agreement inure to the benefit of all of the Holders, whether
or not they execute this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CTI GROUP (HOLDINGS) INC.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
HOLDER
Xxxx Xxxxx
-------------------------------------
Name
By: /s/ Xxxx Xxxxx
---------------------------------
(Signature)
Address:______________________________
______________________________
______________________________
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